UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES
Investment Company Act file number 811-07857
Oppenheimer Real Asset Fund
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(Exact name of registrant as specified in charter)
6803 South Tucson Way, Centennial, Colorado 80112-3924
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(Address of principal executive offices) (Zip code)
Robert G. Zack, Esq.
OppenheimerFunds, Inc.
Two World Financial Center, New York, New York 10281-1008
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(Name and address of agent for service)
Registrant's telephone number, including area code: (303) 768-3200
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Date of fiscal year end: August 31
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Date of reporting period: September 1, 2003 - August 31, 2004
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ITEM 1. REPORTS TO STOCKHOLDERS.
TOP HOLDINGS AND ALLOCATIONS
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SECTOR ALLOCATION ON COMMODITY-LINKED INVESTMENTS
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Energy 72.0%
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Agriculture 12.0
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Industrial Metals 8.0
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Livestock 6.0
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Precious Metals 2.0
Portfolio's holdings and allocations are subject to change. Percentages are as
of August 31, 2004, and are dollar-weighed based on percentages of
commodity-linked investments. Commodity-linked investments are investments whose
return is based upon the price movements (whether up or down) of a particular
commodity or basket of commodities. The Fund's allocation of its investments
within each sector of the GSCI(R) may differ (at times, significantly) from the
sector weightings of the GSCI(R). The Fund is not an index fund.
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PORTFOLIO ALLOCATION
[THE FOLLOWING TABLE WAS REPRESENTED BY A PIE CHART IN THE PRINTED MATERIAL.]
Mortgage-Backed Obligations 30.0%
U.S. Government Obligations 26.4
Corporate Bonds 20.9
Commodity-Linked Notes 10.3
Cash Equivalents 10.1
Asset-Backed Securities 1.7
Foreign Government Obligations 0.4
Municipal Bonds 0.2
Portfolio's holdings and allocations are subject to change. Percentages are as
of August 31, 2004, and are based on total investments.
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8 | OPPENHEIMER REAL ASSET FUND
FUND PERFORMANCE DISCUSSION
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HOW HAS THE FUND PERFORMED? BELOW IS A DISCUSSION BY OPPENHEIMERFUNDS, INC., OF
THE FUND'S PERFORMANCE DURING ITS FISCAL YEAR ENDED AUGUST 31, 2004, FOLLOWED BY
A GRAPHICAL COMPARISON OF THE FUND'S PERFORMANCE TO AN APPROPRIATE BROAD-BASED
MARKET INDEX.
MANAGEMENT'S DISCUSSION OF FUND PERFORMANCE. Buoyed by strong price increases
for most commodities sectors, the Fund performed very well during this 12-month
period, and much of its double-digit total return can be attributed to the
favorable market conditions. To a lesser extent, the strong results, which
surpassed the 12-month total return for the Goldman Sachs Commodities Index(R)
(the GSCI(R)), were due to certain commodities-and fixed income-related
management strategies that added value to the portfolio.
On the commodity side of the portfolio, we have long used three
strategies--intramarket trades, sector focus and term structure--to pursue
higher returns. Over the course of these 12 months, term-structure trades, which
seek to exploit the pricing differences between contracts that mature at
different dates, made the largest contribution to performance. When we foresee
that some event or trend is likely to cause a shift in prices for a commodity
between one point in time and another, we will invest heavily in contracts that
mature when we expect prices to be higher and make smaller investments in the
months when we believe prices will be lower. In the first half of the period,
natural gas term structure trades were a major source of added value.
We also added value by increasing our allocation to industrial metals, an
area where the supply-demand relationship was increasingly favorable; and by
decreasing the investment in agriculture, where we suspected that speculation
had driven prices to unsupportable levels. In retrospect, we believe the Fund
might have done even better had we increased our energy investments at various
points.
Intramarket trades, which are also known as relative value trades, involve
making choices between closely related commodities (e.g., crude oil and
gasoline) to capture pricing inefficiencies between those market segments.
During this period, the markets afforded few attractive opportunities to put
such trades in effect. Thus, intramarket trades contributed the least to
performance.
As always, we took a conservative approach to the management of the assets
invested in fixed-income securities. We view the fixed-income portfolio as a
tool for providing liquidity while making a small contribution to total return.
With that in mind, we maintain a short duration (i.e., a low sensitivity to
changing interest rates), generally in the range of a money market fund. We may
increase or decrease the duration from time to time as our view of the
fixed-income markets becomes more bullish or bearish. Twice during this period,
we successfully anticipated that the market would
9 | OPPENHEIMER REAL ASSET FUND
FUND PERFORMANCE DISCUSSION
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turn bearish and reduced duration to a minimal level in advance of those market
declines. This protected the portfolio to some extent from the subsequent
downturns. Combined with an overweighting in high-quality corporate securities
and, to a lesser extent, agency securities, this helped the Fund's fixed-income
component outperform short-term Treasury securities for the 12 months and was
another reason for the Fund's outperformance vs. the benchmark GSCI(R).
COMPARING THE FUND'S PERFORMANCE TO THE MARKET. The graphs that follow show the
performance of a hypothetical $10,000 investment in each class of shares of the
Fund held until August 31, 2004. In the case of Class A, Class B, Class C, and
Class Y shares, performance is measured from inception of the classes on March
31, 1997. In the case of Class N shares, performance is measured from the
inception of the class on March 1, 2001. The Fund's performance reflects the
deduction of the maximum initial sales charge on Class A shares, the applicable
contingent deferred sales charge on Class B, Class C, and Class N shares, and
reinvestments of all dividends and capital gains distributions. Past performance
cannot guarantee future results.
The Fund's performance is compared to the performance of the Goldman Sachs
Commodity Index(R) (GSCI(R)). The GSCI(R) is a composite index of commodity
sector returns representing an unleveraged long-term investment in commodity
futures that is broadly based across the spectrum of commodities and includes
reinvestment of income (to represent real assets). While correlation to the
GSCI(R) is a current portfolio strategy, it is not a stated objective or
investment policy of Oppenheimer Real Asset Fund. Index performance reflects the
reinvestment of income but does not consider the effect of transaction costs,
and none of the data in the graphs shows the effect of taxes. The Fund's
performance reflects the effects of the Fund's business and operating expenses.
While index comparisons may be useful to provide a benchmark for the Fund's
performance, it must be noted that the Fund's investments are not limited to the
investments in the index.
10 | OPPENHEIMER REAL ASSET FUND
CLASS A SHARES
COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN:
Oppenheimer Real Asset Fund (R) (Class A)
Goldman Sachs Commodity Index (R)
[THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.]
Oppenheimer Goldman Sachs
Real Asset Fund (R) Commodity Index (R)
(Class A Shares)
03/31/1997 $ 9,425 $10,000
05/31/1997 9,679 10,305
08/31/1997 9,717 10,403
11/30/1997 9,161 9,879
02/28/1998 7,750 8,451
05/31/1998 7,057 7,805
08/31/1998 5,594 6,527
11/30/1998 4,872 6,025
02/28/1999 4,464 5,672
05/31/1999 5,028 6,526
08/31/1999 5,958 7,702
11/30/1999 6,160 8,003
02/29/2000 7,294 9,503
05/31/2000 7,803 10,349
08/31/2000 8,850 11,812
11/30/2000 9,566 12,753
02/28/2001 8,572 11,662
05/31/2001 8,489 11,470
08/31/2001 7,980 10,767
11/30/2001 6,435 8,616
02/28/2002 6,434 8,596
05/31/2002 6,990 9,418
08/31/2002 7,538 10,406
11/30/2002 7,463 10,361
02/28/2003 9,934 13,721
05/31/2003 8,826 12,079
08/31/2003 9,277 12,690
11/30/2003 9,340 12,722
02/29/2004 10,719 14,616
05/31/2004 11,765 16,030
08/31/2004 11,637 15,822
AVERAGE ANNUAL TOTAL RETURNS OF CLASS A SHARES WITH SALES CHARGE OF THE FUND AT
08/31/04
1 Year 5 Year Since Inception
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18.22% 12.98% 2.06%
THE PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE, WHICH DOES NOT
GUARANTEE FUTURE RESULTS. THE INVESTMENT RETURN AND PRINCIPAL VALUE OF AN
INVESTMENT IN THE FUND WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN
REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. CURRENT
PERFORMANCE MAY BE LOWER OR HIGHER THAN THE PERFORMANCE QUOTED. FOR PERFORMANCE
DATA CURRENT TO THE MOST RECENT MONTH END, VISIT US AT WWW.OPPENHEIMERFUNDS.COM,
OR CALL US AT 1.800.525.7048. FUND RETURNS INCLUDE CHANGES IN SHARE PRICE,
REINVESTED DISTRIBUTIONS, AND THE APPLICABLE SALES CHARGE: FOR CLASS A SHARES,
THE CURRENT MAXIMUM INITIAL SALES CHARGE OF 5.75%; FOR CLASS B SHARES, THE
CONTINGENT DEFERRED SALES CHARGE OF 5% (1-YEAR) AND 2% (5-YEAR); AND FOR CLASS C
AND N SHARES, THE CONTINGENT 1% DEFERRED SALES CHARGE FOR THE 1-YEAR PERIOD.
THERE IS NO SALES CHARGE FOR CLASS Y SHARES. SEE PAGE 16 FOR FURTHER
INFORMATION.
11 | OPPENHEIMER REAL ASSET FUND
FUND PERFORMANCE DISCUSSION
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CLASS B SHARES
COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN:
Oppenheimer Real Asset Fund (R) (Class B)
Goldman Sachs Commodity Index (R)
[THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.]
Oppenheimer Goldman Sachs
Real Asset Fund (R) Commodity Index (R)
(Class B Shares)
03/31/1997 $10,000 $10,000
05/31/1997 10,250 10,305
08/31/1997 10,270 10,403
11/30/1997 9,670 9,879
02/28/1998 8,156 8,451
05/31/1998 7,413 7,805
08/31/1998 5,865 6,527
11/30/1998 5,101 6,025
02/28/1999 4,662 5,672
05/31/1999 5,246 6,526
08/31/1999 6,202 7,702
11/30/1999 6,402 8,003
02/29/2000 7,570 9,503
05/31/2000 8,081 10,349
08/31/2000 9,144 11,812
11/30/2000 9,855 12,753
02/28/2001 8,822 11,662
05/31/2001 8,722 11,470
08/31/2001 8,185 10,767
11/30/2001 6,591 8,616
02/28/2002 6,576 8,596
05/31/2002 7,132 9,418
08/31/2002 7,663 10,406
11/30/2002 7,573 10,361
02/28/2003 10,068 13,721
05/31/2003 8,934 12,079
08/31/2003 9,392 12,690
11/30/2003 9,455 12,722
02/29/2004 10,852 14,616
05/31/2004 11,910 16,030
08/31/2004 11,781 15,822
AVERAGE ANNUAL TOTAL RETURNS OF CLASS B SHARES WITH SALES CHARGE OF THE FUND AT
08/31/04
1 Year 5 Year Since Inception
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19.32% 13.16% 2.23%
12 | OPPENHEIMER REAL ASSET FUND
CLASS C SHARES
COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN:
Oppenheimer Real Asset Fund (R) (Class C)
Goldman Sachs Commodity Index (R)
[THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.]
Oppenheimer Goldman Sachs
Real Asset Fund (R) Commodity Index (R)
(Class C Shares)
03/31/1997 $10,000 $10,000
05/31/1997 10,240 10,305
08/31/1997 10,260 10,403
11/30/1997 9,650 9,879
02/28/1998 8,141 8,451
05/31/1998 7,408 7,805
08/31/1998 5,862 6,527
11/30/1998 5,088 6,025
02/28/1999 4,660 5,672
05/31/1999 5,237 6,526
08/31/1999 6,195 7,702
11/30/1999 6,397 8,003
02/29/2000 7,556 9,503
05/31/2000 8,069 10,349
08/31/2000 9,133 11,812
11/30/2000 9,845 12,753
02/28/2001 8,808 11,662
05/31/2001 8,719 11,470
08/31/2001 8,180 10,767
11/30/2001 6,584 8,616
02/28/2002 6,568 8,596
05/31/2002 7,114 9,418
08/31/2002 7,658 10,406
11/30/2002 7,570 10,361
02/28/2003 10,058 13,721
05/31/2003 8,921 12,079
08/31/2003 9,346 12,690
11/30/2003 9,396 12,722
02/29/2004 10,752 14,616
05/31/2004 11,783 16,030
08/31/2004 11,628 15,822
AVERAGE ANNUAL TOTAL RETURNS OF CLASS C SHARES WITH SALES CHARGE OF THE FUND AT
08/31/04
1 Year 5 Year Since Inception
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23.42% 13.42% 2.05%
THE PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE, WHICH DOES NOT
GUARANTEE FUTURE RESULTS. THE INVESTMENT RETURN AND PRINCIPAL VALUE OF AN
INVESTMENT IN THE FUND WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN
REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. CURRENT
PERFORMANCE MAY BE LOWER OR HIGHER THAN THE PERFORMANCE QUOTED. FOR PERFORMANCE
DATA CURRENT TO THE MOST RECENT MONTH END, VISIT US AT WWW.OPPENHEIMERFUNDS.COM,
OR CALL US AT 1.800.525.7048. FUND RETURNS INCLUDE CHANGES IN SHARE PRICE,
REINVESTED DISTRIBUTIONS, AND THE APPLICABLE SALES CHARGE: FOR CLASS A SHARES,
THE CURRENT MAXIMUM INITIAL SALES CHARGE OF 5.75%; FOR CLASS B SHARES, THE
CONTINGENT DEFERRED SALES CHARGE OF 5% (1-YEAR) AND 2% (5-YEAR); AND FOR CLASS C
AND N SHARES, THE CONTINGENT 1% DEFERRED SALES CHARGE FOR THE 1-YEAR PERIOD.
THERE IS NO SALES CHARGE FOR CLASS Y SHARES. BECAUSE CLASS B SHARES CONVERT TO
CLASS A SHARES 72 MONTHS AFTER PURCHASE, SINCE-INCEPTION RETURNS FOR CLASS B
SHARES USES CLASS A PERFORMANCE FOR THE PERIOD AFTER CONVERSION. SEE PAGE 16 FOR
FURTHER INFORMATION.
13 | OPPENHEIMER REAL ASSET FUND
FUND PERFORMANCE DISCUSSION
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CLASS N SHARES
COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN:
Oppenheimer Real Asset Fund (R) (Class N)
Goldman Sachs Commodity Index (R)
[THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.]
Oppenheimer Goldman Sachs
Real Asset Fund (R) Commodity Index (R)
(Class N Shares)
03/01/2001 $10,000 $10,000
05/31/2001 9,932 9,836
08/31/2001 9,325 9,233
11/30/2001 7,470 7,388
02/28/2002 7,463 7,371
05/31/2002 8,092 8,076
08/31/2002 8,722 8,923
11/30/2002 8,703 8,885
02/28/2003 11,558 11,766
05/31/2003 10,264 10,358
08/31/2003 10,782 10,882
11/30/2003 10,840 10,909
02/29/2004 12,429 12,534
05/31/2004 13,630 13,746
08/31/2004 13,467 13,568
AVERAGE ANNUAL TOTAL RETURNS OF CLASS N SHARES WITH SALES CHARGE OF THE FUND AT
08/31/04
1 Year Since Inception
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23.90% 8.88%
14 | OPPENHEIMER REAL ASSET FUND
CLASS Y SHARES
COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN:
Oppenheimer Real Asset Fund (R) (Class Y)
Goldman Sachs Commodity Index (R)
[THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL.]
Oppenheimer Goldman Sachs
Real Asset Fund (R) Commodity Index (R)
(Class Y Shares)
03/31/1997 $10,000 $10,000
05/31/1997 10,270 10,305
08/31/1997 10,310 10,403
11/30/1997 9,730 9,879
02/28/1998 8,221 8,451
05/31/1998 7,495 7,805
08/31/1998 5,941 6,527
11/30/1998 5,174 6,025
02/28/1999 4,743 5,672
05/31/1999 5,359 6,526
08/31/1999 6,343 7,702
11/30/1999 6,563 8,003
02/29/2000 7,772 9,503
05/31/2000 8,323 10,349
08/31/2000 9,464 11,812
11/30/2000 10,242 12,753
02/28/2001 9,195 11,662
05/31/2001 9,121 11,470
08/31/2001 8,592 10,767
11/30/2001 6,923 8,616
02/28/2002 6,927 8,596
05/31/2002 7,543 9,418
08/31/2002 8,132 10,406
11/30/2002 8,059 10,361
02/28/2003 10,738 13,721
05/31/2003 9,559 12,079
08/31/2003 10,058 12,690
11/30/2003 10,136 12,722
02/29/2004 11,647 14,616
05/31/2004 12,796 16,030
08/31/2004 12,657 15,822
AVERAGE ANNUAL TOTAL RETURNS OF CLASS Y SHARES WITH SALES CHARGE OF THE FUND AT
08/31/04
1 Year 5 Year Since Inception
------ ------ ---------------
25.84% 14.82% 3.23%
THE PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE, WHICH DOES NOT
GUARANTEE FUTURE RESULTS. THE INVESTMENT RETURN AND PRINCIPAL VALUE OF AN
INVESTMENT IN THE FUND WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN
REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. CURRENT
PERFORMANCE MAY BE LOWER OR HIGHER THAN THE PERFORMANCE QUOTED. FOR PERFORMANCE
DATA CURRENT TO THE MOST RECENT MONTH END, VISIT US AT WWW.OPPENHEIMERFUNDS.COM,
OR CALL US AT 1.800.525.7048. FUND RETURNS INCLUDE CHANGES IN SHARE PRICE,
REINVESTED DISTRIBUTIONS, AND THE APPLICABLE SALES CHARGE: FOR CLASS A SHARES,
THE CURRENT MAXIMUM INITIAL SALES CHARGE OF 5.75%; FOR CLASS B SHARES, THE
CONTINGENT DEFERRED SALES CHARGE OF 5% (1-YEAR) AND 2% (5-YEAR); AND FOR CLASS C
AND N SHARES, THE CONTINGENT 1% DEFERRED SALES CHARGE FOR THE 1-YEAR PERIOD.
THERE IS NO SALES CHARGE FOR CLASS Y SHARES. SEE PAGE 16 FOR FURTHER
INFORMATION.
15 | OPPENHEIMER REAL ASSET FUND
NOTES
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Total returns and the ending account values in the graphs include changes in
share price and reinvestment of dividends and capital gains distributions in a
hypothetical investment for the periods shown. The Fund's total returns shown do
not reflect the deduction of income taxes on an individual's investment. Taxes
may reduce your actual investment returns on income or gains paid by the Fund or
any gains you may realize if you sell your shares.
Investors should consider the Fund's investment objectives, risks, and other
charges and expenses carefully before investing. The Fund's prospectus contains
this and other information about the Fund, and may be obtained by asking your
financial advisor, calling us at 1.800.525.7048 or visiting our website at
www.oppenheimerfunds.com. Read the prospectus carefully before investing.
The Fund's investment strategy and focus can change over time. The mention of
specific fund holdings does not constitute a recommendation by OppenheimerFunds,
Inc.
Please note that Oppenheimer Real Asset Fund(R) is non-diversified and invests a
substantial portion of its assets in derivative instruments that entail
potentially higher volatility and risk of loss than traditional equity or debt
securities. The Fund is not intended as a complete investment program and is
intended for investors with long-term investment goals who are willing to accept
this risk.
CLASS A shares of the Fund were first publicly offered on 3/31/97. Class A
returns include the current maximum initial sales charge of 5.75%.
CLASS B shares of the Fund were first publicly offered on 3/31/97. Class B
returns include the applicable contingent deferred sales charge of 5% (1-year)
and 2% (5-year). Because Class B shares convert to Class A shares 72 months
after purchase, the "since inception" return for Class B uses Class A
performance for the period after conversion. Class B shares are subject to an
annual 0.75% asset-based sales charge.
CLASS C shares of the Fund were first publicly offered on 3/31/97. Class C
returns include the contingent deferred sales charge of 1% for the 1-year
period. Class C shares are subject to an annual 0.75% asset-based sales charge.
CLASS N shares of the Fund were first publicly offered on 3/1/01. Class N shares
are offered only through retirement plans. Unless otherwise noted, Class N
returns include the contingent deferred sales charge of 1% for the 1-year
period. Class N shares are subject to an annual 0.25% asset-based sales charge.
CLASS Y shares of the Fund were first publicly offered on 3/31/97. Class Y
shares are offered principally to certain institutional investors under special
agreement with the Distributor and are not subject to a sales charge.
An explanation of the calculation of performance is in the Fund's Statement of
Additional Information.
16 | OPPENHEIMER REAL ASSET FUND
FUND EXPENSES
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FUND EXPENSES. As a shareholder of the Fund, you incur two types of costs: (1)
transaction costs, which may include sales charges (loads) on purchase payments;
contingent deferred sales charges on redemptions; and redemption fees, if
any; and (2) ongoing costs, including management fees; distribution and service
fees; and other Fund expenses. These examples are intended to help you
understand your ongoing costs (in dollars) of investing in the Fund and to
compare these costs with the ongoing costs of investing in other mutual funds.
The examples are based on an investment of $1,000.00 invested at the beginning
of the period and held for the entire 6-month period ended August 31, 2004.
ACTUAL EXPENSES. The "actual" lines of the table provide information about
actual account values and actual expenses. You may use the information on this
line for the class of shares you hold, together with the amount you invested, to
estimate the expense that you paid over the period. Simply divide your account
value by $1,000.00 (for example, an $8,600.00 account value divided by $1,000.00
= 8.60), then multiply the result by the number in the "actual" line under the
heading entitled "Expenses Paid During Period" to estimate the expenses you paid
on your account during this period.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES. The "hypothetical" lines of the
table provide information about hypothetical account values and hypothetical
expenses based on the Fund's actual expense ratio for each class of shares, and
an assumed rate of return of 5% per year before expenses, which is not the
Fund's actual return. The hypothetical account values and expenses may not be
used to estimate the actual ending account balance or expenses you paid for the
period. You may use this information to compare the ongoing costs of investing
in the Fund and other funds. To do so, compare this 5% hypothetical example for
the class of shares you hold with the 5% hypothetical examples that appear in
the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transactional costs, such as front-end
or contingent deferred sales charges (loads), redemption fees, or a $12.00 fee
imposed annually on accounts valued at less than $500.00 (subject to
17 | OPPENHEIMER REAL ASSET FUND
FUND EXPENSES
- --------------------------------------------------------------------------------
exceptions described in the Statement of Additional Information). Therefore, the
"hypothetical" lines of the table are useful in comparing ongoing costs only,
and will not help you determine the relative total costs of owning different
funds. In addition, if these transactional costs were included, your costs would
have been higher.
- --------------------------------------------------------------------------------
BEGINNING ENDING EXPENSES
ACCOUNT ACCOUNT EXPENSES PAID DURING
VALUE VALUE 6 MONTHS ENDED
(3/1/04) (8/31/04) AUGUST 31, 2004
- --------------------------------------------------------------------------------
Class A Actual $1,000.00 $1,085.60 $ 7.10
- --------------------------------------------------------------------------------
Class A Hypothetical 1,000.00 1,018.35 6.87
- --------------------------------------------------------------------------------
Class B Actual 1,000.00 1,081.20 11.94
- --------------------------------------------------------------------------------
Class B Hypothetical 1,000.00 1,013.72 11.56
- --------------------------------------------------------------------------------
Class C Actual 1,000.00 1,081.50 11.47
- --------------------------------------------------------------------------------
Class C Hypothetical 1,000.00 1,014.18 11.10
- --------------------------------------------------------------------------------
Class N Actual 1,000.00 1,083.50 9.26
- --------------------------------------------------------------------------------
Class N Hypothetical 1,000.00 1,016.29 8.96
- --------------------------------------------------------------------------------
Class Y Actual 1,000.00 1,086.70 4.94
- --------------------------------------------------------------------------------
Class Y Hypothetical 1,000.00 1,020.41 4.79
Hypothetical assumes 5% annual return before expenses.
Expenses are equal to the Fund's annualized expense ratio for that class,
multiplied by the average account value over the period, multiplied by 184/366
(to reflect the one-half year period). Those expense ratios for the 6-month
period ended August 31, 2004 are as follows:
CLASS EXPENSE RATIOS
- ----------------------------
Class A 1.35%
- ----------------------------
Class B 2.27
- ----------------------------
Class C 2.18
- ----------------------------
Class N 1.76
- ----------------------------
Class Y 0.94
The expense ratios reflect voluntary reimbursements of expenses by the Fund's
Transfer Agent that can be terminated at any time, without advance notice. The
"Financial Highlights" tables in the Fund's financial statements, included in
this report, also show the gross expense ratios, without such reimbursements.
- --------------------------------------------------------------------------------
18 | OPPENHEIMER REAL ASSET FUND
STATEMENT OF INVESTMENTS August 31, 2004
- --------------------------------------------------------------------------------
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- ---------------------------------------------------------------------------------------------------------------
ASSET-BACKED SECURITIES--2.3%
- ---------------------------------------------------------------------------------------------------------------
BMW Vehicle Owner Trust, Automobile Loan Certificates, Series 2003-A,
Cl. A2, 1.45%, 11/25/05 $ 27,651 $ 27,664
- ---------------------------------------------------------------------------------------------------------------
Capital Auto Receivables Asset Trust, Automobile Mtg.-Backed Nts.,
Series 2002-3, Cl. A2A, 3.05%, 9/15/05 1 839,893 842,154
- ---------------------------------------------------------------------------------------------------------------
Chase Funding Mortgage Loan Asset-Backed Certificates, Home Equity
Mtg. Obligations, Series 2003-1, Cl. 1A3, 3.14%, 7/25/23 2,440,000 2,445,227
- ---------------------------------------------------------------------------------------------------------------
Chase Manhattan Auto Owner Trust, Automobile Loan Pass-Through
Certificates, Series 2002-A, Cl. A4, 4.24%, 9/15/08 960,000 973,704
- ---------------------------------------------------------------------------------------------------------------
DaimlerChrysler Auto Trust, Automobile Loan Pass-Through Certificates,
Series 2004-B, Cl. A2, 2.48%, 2/8/07 3,300,000 3,300,000
- ---------------------------------------------------------------------------------------------------------------
Harley-Davidson Motorcycle Trust, Motorcycle Receivable Nts.,
Series 2002-2, Cl. A1, 1.91%, 4/15/07 66,003 66,050
- ---------------------------------------------------------------------------------------------------------------
M&I Auto Loan Trust, Automobile Loan Certificates, Series 2003-1,
Cl. A2, 1.60%, 7/20/06 644,006 643,648
- ---------------------------------------------------------------------------------------------------------------
MSF Funding LLC, Collateralized Mtg. Obligations, Series 2000-1, Cl. C,
8.965%, 7/25/07 2,3 295,529 11,821
- ---------------------------------------------------------------------------------------------------------------
NC Finance Trust, Collateralized Mtg. Obligations, Series 1999-I,
Cl. ECFD, 8.75%, 1/25/29 2 645,555 172,283
- ---------------------------------------------------------------------------------------------------------------
Nissan Auto Receivables Owner Trust, Automobile Receivable Nts.,
Series 2002-A, Cl. A4, 4.28%, 10/16/06 973,000 983,132
- ---------------------------------------------------------------------------------------------------------------
Salomon Smith Barney Mutual Fund Fee Trust XIV, Asset-Backed Nts.,
Series 2000-14, Cl. 2, 8.61%, 9/30/08 3,449,697 1,244,047
- ---------------------------------------------------------------------------------------------------------------
Toyota Auto Receivables Owner Trust, Automobile Mtg.-Backed
Obligations, Series 2003-A, Cl. A2, 1.28%, 8/15/05 53,454 53,477
- ---------------------------------------------------------------------------------------------------------------
USAA Auto Owner Trust, Automobile Loan Asset-Backed Nts.,
Series 2004-2, Cl. A2, 2.38%, 2/15/07 3,260,000 3,266,371
- ---------------------------------------------------------------------------------------------------------------
Wells Fargo Home Equity Trust, Home Equity Loan Pass-Through
Certificates, Series 2004-2, Cl. AI1B, 3.35%, 9/26/34 4 6,310,000 6,310,000
------------
Total Asset-Backed Securities (Cost $23,285,642) 20,339,578
- ---------------------------------------------------------------------------------------------------------------
MORTGAGE-BACKED OBLIGATIONS--41.3%
- ---------------------------------------------------------------------------------------------------------------
GOVERNMENT AGENCY--38.2%
- ---------------------------------------------------------------------------------------------------------------
FHLMC/FNMA/SPONSORED--38.2%
Federal Home Loan Mortgage Corp.:
7%, 9/1/33 1,400,188 1,495,580
7%, 9/1/34 4 78,800,000 83,725,000
8%, 4/1/16 356,867 383,594
9%, 8/1/22-5/1/25 90,809 101,889
- ---------------------------------------------------------------------------------------------------------------
Federal Home Loan Mortgage Corp., Interest-Only Stripped
Mtg.-Backed Security, Series 177, Cl. B, (0.551)%, 7/1/26 5 2,212,261 423,559
- ---------------------------------------------------------------------------------------------------------------
Federal Home Loan Mortgage Corp., Structured Pass-Through
Securities, Collateralized Mtg. Obligations, Series T-42, Cl. A2, 5.50%, 2/25/42 1,706 1,707
19 | OPPENHEIMER REAL ASSET FUND
STATEMENT OF INVESTMENTS Continued
- --------------------------------------------------------------------------------
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- -----------------------------------------------------------------------------------------------------------
FHLMC/FNMA/SPONSORED Continued
Federal National Mortgage Assn.:
4.50%, 9/1/19 4 $ 17,293,000 $ 17,282,192
5%, 9/1/34 4 743,000 737,196
5.50%, 9/1/19-9/1/34 4 62,917,000 64,485,412
6.50%, 9/30/34 4 27,190,000 28,549,500
7%, 11/1/33-7/1/34 12,422,738 13,212,423
7%, 9/1/34-10/1/34 4 119,405,000 126,715,822
8.50%, 7/1/32 102,751 111,524
-------------
337,225,398
- -----------------------------------------------------------------------------------------------------------
GNMA/GUARANTEED--0.0%
Government National Mortgage Assn., 8.50%, 8/15/17-12/15/17 124,712 137,579
-------------
137,579
- -----------------------------------------------------------------------------------------------------------
PRIVATE--3.1%
- -----------------------------------------------------------------------------------------------------------
COMMERCIAL--3.1%
Bank of America Mortgage Securities, Inc., Collateralized Mtg. Obligations
Pass-Through Certificates:
Series 2004-2, Cl. 2A1, 6.50%,7/20/32 6,190,000 6,393,109
Series 2004-E, Cl. 2A9, 3.712%, 6/25/34 3,553,552 3,562,160
Series 2004-G, Cl. 2A1, 2.469%, 8/25/34 3,824,689 3,825,286
- -----------------------------------------------------------------------------------------------------------
Bear Stearns Commercial Mortgage Securities, Inc., Commercial Mtg.
Obligations, Series 2003-T10, Cl. A1, 4%, 3/13/40 1,260,138 1,262,706
- -----------------------------------------------------------------------------------------------------------
GE Capital Commercial Mortgage Corp., Commercial Mtg. Obligations:
Series 2003-C1, Cl. A2, 4.093%, 1/10/38 1,081,000 1,089,506
Series 2004-C3, Cl. A2, 4.433%, 7/10/39 2,050,000 2,088,945
- -----------------------------------------------------------------------------------------------------------
GS Mortgage Securities Corp. II, Commercial Mtg. Pass-Through
Certificates, Series 2004-GG2, Cl. A3, 4.602%, 8/10/38 1,370,000 1,410,063
- -----------------------------------------------------------------------------------------------------------
J.P. Morgan Chase Commercial Mortgage Securities Corp., Commercial
Mtg. Pass-Through Certificates, Series 2003-ML1A, Cl. A1, 3.972%, 3/12/39 774,830 775,294
- -----------------------------------------------------------------------------------------------------------
Wells Fargo Mortgage Backed Securities Trust, Collateralized Mtg.
Obligations, Series 2004-N, Cl. A10, 3.803%, 8/25/34 2 6,611,970 6,636,764
-------------
27,043,833
-------------
Total Mortgage-Backed Obligations (Cost $362,343,458) 364,406,810
- -----------------------------------------------------------------------------------------------------------
U.S. GOVERNMENT OBLIGATIONS--36.4%
- -----------------------------------------------------------------------------------------------------------
Federal Home Loan Bank Unsec. Bonds:
4.125%, 5/13/05 25,000,000 25,374,525
Series EY06, 5.25%, 8/15/06 1 9,286,000 9,748,536
- -----------------------------------------------------------------------------------------------------------
Federal Home Loan Mortgage Corp. Unsec. Nts.:
1.75%, 5/15/05 47,330,000 47,260,756
4.25%, 6/15/05 11,000,000 11,193,446
7%, 7/15/05 55,000,000 57,355,265
20 | OPPENHEIMER RE AL ASSET FUND
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- ----------------------------------------------------------------------------------------------------
U.S. GOVERNMENT OBLIGATIONS Continued
- ----------------------------------------------------------------------------------------------------
Federal National Mortgage Assn. Unsec. Nts.:
1.33%, 2/23/05 1 $24,000,000 $ 23,933,064
1.50%, 9/21/05 20,000,000 19,880,080
3.01%, 6/2/06 7,600,000 7,635,462
5.75%, 6/15/05 22,250,000 22,901,057
7%, 7/15/05 1 50,000,000 52,141,150
- ----------------------------------------------------------------------------------------------------
U.S. Treasury Nts.:
1.125%, 6/30/05 1 18,000,000 17,893,836
3%, 2/15/09 1,6 805,000 798,649
6.75%, 5/15/05 7 24,000,000 24,820,320
-------------
Total U.S. Government Obligations (Cost $320,703,160) 320,936,146
- ----------------------------------------------------------------------------------------------------
FOREIGN GOVERNMENT OBLIGATIONS--0.5%
- ----------------------------------------------------------------------------------------------------
Ontario (Province of) Nts., 7% 8/4/05 4,200,000 4,389,844
- ----------------------------------------------------------------------------------------------------
Quebec (Province of) Nts., 8.625% 1/19/05 500,000 512,872
-------------
Total Foreign Government Obligations (Cost $4,890,291) 4,902,716
- ----------------------------------------------------------------------------------------------------
CORPORATE BONDS AND NOTES--28.8%
- ----------------------------------------------------------------------------------------------------
CONSUMER DISCRETIONARY--4.2%
- ----------------------------------------------------------------------------------------------------
AUTOMOBILES--1.7%
DaimlerChrysler North America Holding Corp.:
3.40% Nts., Series D, 12/15/04 1 860,000 861,903
6.90% Unsec. Nts., 9/1/04 1,850,000 1,850,000
7.40% Unsec. Nts., 1/20/05 700,000 713,917
7.75% Nts., 6/15/05 1,000,000 1,041,354
- ----------------------------------------------------------------------------------------------------
Ford Motor Credit Co.:
7.50% Unsec. Nts., 3/15/05 1,000,000 1,026,419
7.60% Nts., 8/1/05 1,900,000 1,982,369
- ----------------------------------------------------------------------------------------------------
General Motors Acceptance Corp.:
7.50% Nts., 7/15/05 2,200,000 2,293,267
8.75% Medium-Term Nts., Series SMN1, 7/15/05 650,000 681,176
- ----------------------------------------------------------------------------------------------------
General Motors Nova Scotia Finance Co., 6.85% Nts., 10/15/08 1,205,000 1,282,694
- ----------------------------------------------------------------------------------------------------
Hertz Corp. (The), 6.50% Sr. Nts., 5/15/06 1 1,215,000 1,273,783
- ----------------------------------------------------------------------------------------------------
Volkswagen Credit, Inc., 1.719% Nts., 6/13/05 3,8 2,000,000 2,001,260
-------------
15,008,142
- ----------------------------------------------------------------------------------------------------
HOUSEHOLD DURABLES--0.1%
Fortune Brands, Inc., 7.125% Sr. Unsec. Nts., 11/1/04 8 1,415,000 1,426,495
- ----------------------------------------------------------------------------------------------------
MEDIA--2.0%
Clear Channel Communications, Inc., 4.625% Sr. Unsec. Nts., 1/15/08 875,000 892,525
- ----------------------------------------------------------------------------------------------------
Cox Communications, Inc., 6.69% Nts., 9/20/04 1,700,000 1,703,205
- ----------------------------------------------------------------------------------------------------
Gannett Co., Inc., 4.95% Unsec. Nts., 4/1/05 4,165,000 4,228,758
- ----------------------------------------------------------------------------------------------------
New York Times Co. (The), 7.625% Unsec. Unsub. Nts., 3/15/05 2,620,000 2,699,928
21 | OPPENHEIMER REAL ASSET FUND
STATEMENT OF INVESTMENTS Continued
- --------------------------------------------------------------------------------
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- ---------------------------------------------------------------------------------------------------------
MEDIA Continued
News America, Inc., 6.625% Sr.Nts., 1/9/08 $ 443,000 $ 484,984
- ---------------------------------------------------------------------------------------------------------
Time Warner Cos., Inc., 8.18% Nts., 8/15/07 1 890,000 1,003,065
- ---------------------------------------------------------------------------------------------------------
Viacom, Inc.:
6.40% Sr. Nts., 1/30/06 1 675,000 710,356
7.15% Sr. Unsec. Nts., 5/20/05 3,050,000 3,154,801
7.75% Sr. Unsec. Nts., 6/1/05 500,000 520,790
- ---------------------------------------------------------------------------------------------------------
Walt Disney Co. (The):
4.50% Nts., 9/15/04 1,500,000 1,501,481
5.375% Sr. Unsec. Nts., 6/1/07 410,000 430,919
------------
17,330,812
- ---------------------------------------------------------------------------------------------------------
MULTILINE RETAIL--0.4%
Target Corp., 7.50% Sr. Unsec. Nts., 2/15/05 3,525,000 3,607,450
- ---------------------------------------------------------------------------------------------------------
CONSUMER STAPLES--1.9%
- ---------------------------------------------------------------------------------------------------------
BEVERAGES--0.6%
Coca-Cola Enterprises, Inc., 8% Nts., 1/4/05 3,000,000 3,057,006
- ---------------------------------------------------------------------------------------------------------
Diageo Capital plc, 6.125% Unsec. Nts., 8/15/05 2,250,000 2,330,791
------------
5,387,797
- ---------------------------------------------------------------------------------------------------------
FOOD & STAPLES RETAILING--0.8%
Kroger Co. (The), 7.625% Sr. Nts., 9/15/06 460,000 500,354
- ---------------------------------------------------------------------------------------------------------
Price/Costco Wholesale Corp., 7.125% Sr. Nts., 6/15/05 2,500,000 2,590,145
- ---------------------------------------------------------------------------------------------------------
Safeway, Inc., 7.25% Nts., 9/15/04 1,500,000 1,502,003
- ---------------------------------------------------------------------------------------------------------
Secured Finance, Inc., 9.05% Bonds, 12/15/04 2,000,000 2,032,226
------------
6,624,728
- ---------------------------------------------------------------------------------------------------------
FOOD PRODUCTS--0.5%
ConAgra, Inc., 7.40% Sub. Nts., 9/15/04 150,000 150,249
- ---------------------------------------------------------------------------------------------------------
General Mills, Inc., 3.875% Nts., 11/30/07 515,000 521,973
- ---------------------------------------------------------------------------------------------------------
Nabisco, Inc., 6.375% Nts., 2/1/05 4,000,000 4,055,756
------------
4,727,978
- ---------------------------------------------------------------------------------------------------------
HOUSEHOLD PRODUCTS--0.0%
Procter & Gamble Co. (The), 6.60% Unsec. Unsub. Bonds, 12/15/04 50,000 50,711
- ---------------------------------------------------------------------------------------------------------
ENERGY--0.5%
- ---------------------------------------------------------------------------------------------------------
OIL & GAS--0.5%
BP Canada Energy Co., 6.75% Unsec. Debs., 2/15/05 100,000 102,163
- ---------------------------------------------------------------------------------------------------------
BP Capital Markets plc, 4.625% Nts., 5/27/05 3,900,000 3,969,588
- ---------------------------------------------------------------------------------------------------------
Chevron Corp. Profit Sharing Savings Plan Trust Fund, 8.11% Debs., 12/1/04 44,000 44,654
------------
4,116,405
22 | OPPENHEIMER REAL ASSET FUND
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- ---------------------------------------------------------------------------------------------------------------
FINANCIALS--14.4%
- ---------------------------------------------------------------------------------------------------------------
CAPITAL MARKETS--0.9%
Amvescap plc, 6.60% Sr. Unsec. Nts., 5/15/05 $ 1,175,000 $ 1,206,204
- ---------------------------------------------------------------------------------------------------------------
Bank of New York Co., Inc. (The):
3.75% Unsec. Unsub. Nts., 2/15/08 1 470,000 475,307
8.50% Unsec. Sub. Nts., 12/15/04 1 1,600,000 1,629,982
- ---------------------------------------------------------------------------------------------------------------
Bankers Trust Corp., 8.25% Unsec. Sub. Nts., 5/1/05 1,800,000 1,869,242
- ---------------------------------------------------------------------------------------------------------------
Credit Suisse First Boston, Inc., (USA), 5.75% Nts., 4/15/07 600,000 639,441
- ---------------------------------------------------------------------------------------------------------------
Northern Trust Co., 7.50% Nts., 2/11/05 2,000,000 2,048,300
------------
7,868,476
- ---------------------------------------------------------------------------------------------------------------
COMMERCIAL BANKS--4.6%
Abbey National First Capital BV, 8.20% Sub. Nts., 10/15/04 2,300,000 2,317,213
- ---------------------------------------------------------------------------------------------------------------
ABN Amro Bank NV (Chicago), 7.25% Unsec. Sub. Nts., 5/31/05 2,500,000 2,589,915
- ---------------------------------------------------------------------------------------------------------------
Bank of America Corp.:
3.875% Nts., 1/15/08 1 500,000 508,536
6.875% Sub. Nts., 2/15/05 125,000 127,596
7.875% Sr. Unsec. Nts., 5/16/05 1,050,000 1,091,854
- ---------------------------------------------------------------------------------------------------------------
Credit Suisse First Boston, Inc. (New York), 1.41% Nts., 9/9/05 3 3,800,000 3,802,660
- ---------------------------------------------------------------------------------------------------------------
Fleet Boston Corp., 8% Sub. Nts., 9/15/04 100,000 100,208
- ---------------------------------------------------------------------------------------------------------------
Fleet National Bank, 8.625% Sub. Nts., 2/15/05 250,000 257,970
- ---------------------------------------------------------------------------------------------------------------
FleetBoston Financial Corp., 4.20% Nts., 11/30/07 430,000 443,207
- ---------------------------------------------------------------------------------------------------------------
Household Finance Corp.:
6.50% Unsec. Nts., 1/24/06 515,000 542,632
8% Sr. Nts., 5/9/05 3,700,000 3,847,427
- ---------------------------------------------------------------------------------------------------------------
KeyCorp, 4.625% Sr. Nts., Series G, 5/16/05 2,400,000 2,437,272
- ---------------------------------------------------------------------------------------------------------------
M&I Bank, Central US, 1.568% Certificate of Deposit, 3/10/05 3,200,000 3,195,568
- ---------------------------------------------------------------------------------------------------------------
Manufacturers & Traders Trust, 7% Unsec. Sub. Nts., 7/1/05 3,400,000 3,523,437
- ---------------------------------------------------------------------------------------------------------------
National City Corp., 7.20% Unsec. Sub. Nts., 5/15/05 1,510,000 1,563,090
- ---------------------------------------------------------------------------------------------------------------
PNC Bank NA, 7.875% Sub. Nts., 4/15/05 1 1,630,000 1,686,105
- ---------------------------------------------------------------------------------------------------------------
PNC Funding Corp., 7% Unsec. Nts., 9/1/04 1,250,000 1,250,000
- ---------------------------------------------------------------------------------------------------------------
Santander Financial Issuances Ltd., 7.875% Unsec. Sub. Nts., 4/15/05 1,600,000 1,656,888
- ---------------------------------------------------------------------------------------------------------------
U.S. Bancorp, 4.75% Sr. Nts., Series N, 6/30/05 3,500,000 3,567,480
- ---------------------------------------------------------------------------------------------------------------
Wachovia Corp.:
6.80% Unsec. Sub. Nts., 6/1/05 1,400,000 1,446,221
7.45% Sr. Unsec. Unsub. Nts., 7/15/05 2,900,000 3,025,326
- ---------------------------------------------------------------------------------------------------------------
Washington Mutual, Inc.:
4.375% Nts., 1/15/08 515,000 528,565
7.25% Sr. Nts., 8/15/05 750,000 782,441
------------
40,291,611
23 | OPPENHEIMER REAL ASSET FUND
STATEMENT OF INVESTMENTS Continued
- --------------------------------------------------------------------------------
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- ---------------------------------------------------------------------------------------------------------------
CONSUMER FINANCE--0.4%
Newcourt Credit Group, Inc., 6.875% Unsec. Sub. Nts., Series B, 2/16/05 $ 3,600,000 $ 3,677,904
- ---------------------------------------------------------------------------------------------------------------
DIVERSIFIED FINANCIAL SERVICES--4.6%
American Express Co., 5.50% Nts., 9/12/06 1 770,000 810,480
- ---------------------------------------------------------------------------------------------------------------
Associates Corp. of North America:
6.20% Sr. Nts., 5/16/05 2,000,000 2,055,850
6.625% Sr. Nts., 6/15/05 100,000 103,249
- ---------------------------------------------------------------------------------------------------------------
Bank One Corp., 7% Jr. Unsec. Sub. Nts., 7/15/05 600,000 624,081
- ---------------------------------------------------------------------------------------------------------------
Chase Manhattan Corp.:
6.75% Sr. Nts., Series C, 12/1/04 1,200,000 1,214,316
7.125% Sub. Debs., 3/1/05 350,000 358,880
- ---------------------------------------------------------------------------------------------------------------
CIT Group, Inc.:
4.125% Sr. Nts., 2/21/06 900,000 919,318
7.125% Sr. Nts., 10/15/04 1,200,000 1,207,828
- ---------------------------------------------------------------------------------------------------------------
Citigroup, Inc., 3.50% Nts., 2/1/08 800,000 803,524
- ---------------------------------------------------------------------------------------------------------------
Export Development Canada, 4.55% Nts., 6/30/05 4,000,000 4,086,232
- ---------------------------------------------------------------------------------------------------------------
Exxon Capital Corp., 1.70% Unsec. Unsub. Nts., 11/15/04 9 1,100,000 1,095,602
- ---------------------------------------------------------------------------------------------------------------
Goldman Sachs Group, Inc. (The):
4.125% Nts., 1/15/08 1 1,000,000 1,021,291
7.50% Sr. Unsec. Unsub. Nts., 1/28/05 1 2,300,000 2,350,600
7.625% Nts., 8/17/05 1,000,000 1,050,591
- ---------------------------------------------------------------------------------------------------------------
JPMorgan Chase & Co., 4% Nts., 2/1/08 800,000 813,579
- ---------------------------------------------------------------------------------------------------------------
Lehman Brothers Holdings, Inc., 7.75% Sr. Unsec. Nts., 1/15/05 2,440,000 2,491,250
- ---------------------------------------------------------------------------------------------------------------
MBNA Corp., 5.625% Nts., 11/30/07 500,000 530,385
- ---------------------------------------------------------------------------------------------------------------
Mellon Funding Corp., 7.50% Sr. Unsec. Nts., 6/15/05 3,600,000 3,738,222
- ---------------------------------------------------------------------------------------------------------------
Merrill Lynch & Co., Inc.:
4% Nts., Series B, 11/15/07 410,000 417,715
4.125% Nts., Series C, 1/15/09 3,530,000 3,573,677
- ---------------------------------------------------------------------------------------------------------------
Morgan Stanley, 7.75% Sr. Nts., 6/15/05 4,150,000 4,330,264
- ---------------------------------------------------------------------------------------------------------------
SLM Corp., 2.90% Nts., Series A, 7/1/05 4,400,000 4,418,775
- ---------------------------------------------------------------------------------------------------------------
Tyco Capital Corp., 6.625% Sr. Unsec. Nts., 6/15/05 1,100,000 1,136,918
- ---------------------------------------------------------------------------------------------------------------
Volkswagen Credit, Inc., 1.88% Nts., 7/21/05 3,8 1,900,000 1,899,894
------------
41,052,521
- ---------------------------------------------------------------------------------------------------------------
INSURANCE--3.2%
Allstate Corp., 7.875% Sr. Unsec. Nts., 5/1/05 3,000,000 3,110,304
- ---------------------------------------------------------------------------------------------------------------
Allstate Financial Global Funding LLC, 7.125% Nts., 9/26/05 8 1,400,000 1,466,304
- ---------------------------------------------------------------------------------------------------------------
AXA Financial, Inc., 9% Sr. Unsec. Nts., 12/15/04 3,830,000 3,901,227
- ---------------------------------------------------------------------------------------------------------------
Hartford Financial Services Group, Inc. (The), 7.75% Sr. Unsec. Nts., 6/15/05 2,670,000 2,777,753
- ---------------------------------------------------------------------------------------------------------------
John Hancock Global Funding II, 5% Nts., 7/27/07 8 760,000 799,873
- ---------------------------------------------------------------------------------------------------------------
Lincoln National Corp., 7.25% Unsec. Debs., 5/15/05 3,475,000 3,603,266
- ---------------------------------------------------------------------------------------------------------------
Marsh & McLennan Cos., Inc., 3.625% Nts., 2/15/08 1,130,000 1,136,948
24 | OPPENHEIMER REAL ASSET FUND
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- ---------------------------------------------------------------------------------------------------------------
INSURANCE Continued
MetLife, Inc., 3.911% Nts., 5/15/05 $ 4,550,000 $ 4,608,668
- ---------------------------------------------------------------------------------------------------------------
Monumental Global Funding II, 3.85% Nts., 3/3/08 8 1,120,000 1,139,168
- ---------------------------------------------------------------------------------------------------------------
Pricoa Global Funding I, 3.90% Nts., 12/15/08 8 1,800,000 1,807,715
- ---------------------------------------------------------------------------------------------------------------
St. Paul Travelers Cos., Inc. (The), 7.875% Sr. Unsec. Nts., 4/15/05 2,350,000 2,429,432
- ---------------------------------------------------------------------------------------------------------------
Teachers Insurance and Annuity Assn. Global Markets, 3.875% Sr
Unsec. Nts., 1/22/08 8 1,750,000 1,779,146
------------
28,559,804
- ---------------------------------------------------------------------------------------------------------------
REAL ESTATE--0.3%
Security Capital Group, Inc., 6.95% Sr. Unsec. Nts., 6/15/05 1,500,000 1,554,638
- ---------------------------------------------------------------------------------------------------------------
Spieker Properties LP, 6.75% Unsec. Unsub. Nts., 1/15/08 800,000 883,198
------------
2,437,836
- ---------------------------------------------------------------------------------------------------------------
THRIFTS & MORTGAGE FINANCE--0.4%
Aristar, Inc., 7.375% Sr. Unsec. Nts., 9/1/04 2,061,000 2,061,000
- ---------------------------------------------------------------------------------------------------------------
Countrywide Home Loans, Inc.:
5.50% Nts., Series K, 2/1/07 1 635,000 669,121
6.51% Nts., Series F, 2/11/05 250,000 254,755
6.84% Nts., Series F, 10/22/04 320,000 322,156
6.875% Sr. Unsec. Unsub. Nts., Series D, 9/15/05 115,000 119,773
------------
3,426,805
- ---------------------------------------------------------------------------------------------------------------
HEALTH CARE--1.2%
- ---------------------------------------------------------------------------------------------------------------
HEALTH CARE EQUIPMENT & SUPPLIES--0.3%
Boston Scientific Corp., 6.625% Unsec. Nts., 3/15/05 3,000,000 3,066,138
- ---------------------------------------------------------------------------------------------------------------
HEALTH CARE PROVIDERS & SERVICES--0.5%
Anthem, Inc., 4.875% Unsub. Nts., 8/1/05 420,000 428,056
- ---------------------------------------------------------------------------------------------------------------
Kaiser Foundation Hospitals, 9.55% Debs., 7/15/05 3,400,000 3,607,172
------------
4,035,228
- ---------------------------------------------------------------------------------------------------------------
PHARMACEUTICALS--0.4%
Bristol-Myers Squibb Co., 4.75% Nts., 10/1/06 875,000 907,751
- ---------------------------------------------------------------------------------------------------------------
Merck & Co., Inc., 4.125% Nts., Series E, 1/18/05 310,000 312,553
- ---------------------------------------------------------------------------------------------------------------
Pfizer, Inc., 3.625% Nts., 11/1/04 2,500,000 2,507,495
------------
3,727,799
- ---------------------------------------------------------------------------------------------------------------
INDUSTRIALS--2.9%
- ---------------------------------------------------------------------------------------------------------------
AEROSPACE & DEFENSE--1.1%
Boeing Capital Corp., 5.65% Sr. Unsec. Nts., 5/15/06 144,000 151,097
- ---------------------------------------------------------------------------------------------------------------
Boeing Co., 6.625% Unsec. Nts., 6/1/05 3,500,000 3,600,776
- ---------------------------------------------------------------------------------------------------------------
Honeywell International, Inc., 6.125% Unsec. Unsub. Nts., 7/1/05 3,321,000 3,418,485
25 | OPPENHEIMER REAL ASSET FUND
STATEMENT OF INVESTMENTS Continued
- --------------------------------------------------------------------------------
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- -------------------------------------------------------------------------------------------------------
AEROSPACE & DEFENSE Continued
McDonnell Douglas Corp., 6.875% Unsec. Unsub. Nts., 11/1/06 $ 259,000 $ 279,579
- -------------------------------------------------------------------------------------------------------
United Technologies Corp., 6.625% Unsec. Sub. Nts., 11/15/04 1,800,000 1,816,679
------------
9,266,616
- -------------------------------------------------------------------------------------------------------
AIRLINES--0.1%
Southwest Airlines Co., 8% Unsec. Nts., 3/1/05 1,000,000 1,024,836
- -------------------------------------------------------------------------------------------------------
COMMERCIAL SERVICES & SUPPLIES--0.2%
Block Financial Corp., 6.75% Sr. Unsec. Nts., 11/1/04 2,000,000 2,015,942
- -------------------------------------------------------------------------------------------------------
INDUSTRIAL CONGLOMERATES--0.9%
3M Co., 4.25% Nts., Series C, 9/1/04 695,000 695,000
- -------------------------------------------------------------------------------------------------------
General Electric Capital Corp.:
5.625% Sr. Unsec. Unsub. Nts., 5/13/05 350,000 358,365
7.50% Nts., Series A, 5/15/05 2,700,000 2,801,404
8.85% Debs., 4/1/05 500,000 518,808
- -------------------------------------------------------------------------------------------------------
Textron Financial Corp., 7.125% Nts., 12/9/04 3,355,000 3,400,386
------------
7,773,963
- -------------------------------------------------------------------------------------------------------
MACHINERY--0.4%
Ingersoll-Rand Co., 6.51% Nts., Series B, 12/1/04 2,000,000 2,021,406
- -------------------------------------------------------------------------------------------------------
John Deere Capital Corp., 4.125% Sr. Nts., Series D, 7/15/05 1,675,000 1,702,177
------------
3,723,583
- -------------------------------------------------------------------------------------------------------
ROAD & RAIL--0.2%
Consolidated Rail Corp., 7.07% Sec. Nts., Series 92-A, 4/1/05 300,000 308,326
- -------------------------------------------------------------------------------------------------------
Norfolk Southern Railway Co., 7% Equipment Trust Nts., Series J, 6/15/05 650,000 673,138
- -------------------------------------------------------------------------------------------------------
Sante Fe Pacific Corp., 8.625% Sr. Unsec. Nts., 11/1/04 600,000 605,030
------------
1,586,494
- -------------------------------------------------------------------------------------------------------
INFORMATION TECHNOLOGY--0.4%
- -------------------------------------------------------------------------------------------------------
COMPUTERS & PERIPHERALS--0.4%
Hewlett-Packard Co., 7.15% Nts., 6/15/05 3,700,000 3,841,803
- -------------------------------------------------------------------------------------------------------
MATERIALS--0.1%
- -------------------------------------------------------------------------------------------------------
PAPER & FOREST PRODUCTS--0.1%
Westvaco Corp., 6.85% Unsec. Unsub. Nts., 11/15/04 350,000 352,743
- -------------------------------------------------------------------------------------------------------
TELECOMMUNICATION SERVICES--1.8%
- -------------------------------------------------------------------------------------------------------
DIVERSIFIED TELECOMMUNICATION SERVICES--1.4%
Ameritech Capital Funding Corp.:
6.30% Unsec. Sub. Nts., 10/15/04 500,000 502,517
7.50% Unsec. Unsub. Debs., 4/1/05 1 2,000,000 2,058,770
- -------------------------------------------------------------------------------------------------------
BellSouth Telecommunication, Inc., 7% Nts., 2/1/05 30,000 30,597
- -------------------------------------------------------------------------------------------------------
British Telecommunications plc, 6.75% Unsec. Bonds, 10/28/04 1,600,000 1,612,800
- -------------------------------------------------------------------------------------------------------
Citizens Communications Co., 7.625% Sr. Unsub. Nts., 8/15/08 515,000 535,600
26 | OPPENHEIMER REAL ASSET FUND
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- ----------------------------------------------------------------------------------------------------------
DIVERSIFIED TELECOMMUNICATION SERVICES Continued
GTE North, Inc., 6.40% Debs., Series E, 2/15/05 $ 605,000 $ 615,761
- ----------------------------------------------------------------------------------------------------------
NYNEX Capital Funding Co., 8.75% Nts., Series B, 12/1/04 600,000 608,986
- ----------------------------------------------------------------------------------------------------------
Pacific Bell, 6.25% Nts., 3/1/05 350,000 356,815
- ----------------------------------------------------------------------------------------------------------
Southern New England Telecommunications Corp., 7% Nts., Series 2, 8/15/05 200,000 208,643
- ----------------------------------------------------------------------------------------------------------
Southwestern Bell Telephone Co., 6.625% Unsec. Nts., 4/1/05 1,908,000 1,956,221
- ----------------------------------------------------------------------------------------------------------
Telefonica Europe BV, 7.35% Nts., 9/15/05 2,600,000 2,731,916
- ----------------------------------------------------------------------------------------------------------
Verizon Wireless Capital LLC, 5.375% Unsub. Nts., 12/15/06 860,000 904,788
-------------
12,123,414
- ----------------------------------------------------------------------------------------------------------
WIRELESS TELECOMMUNICATION SERVICES--0.4%
Vodafone Group plc:
3.95% Unsec. Nts., 1/30/08 860,000 875,302
7.625% Jr. Unsec. Nts., 2/15/05 2,632,000 2,696,284
-------------
3,571,586
- ----------------------------------------------------------------------------------------------------------
UTILITIES--1.4%
- ----------------------------------------------------------------------------------------------------------
ELECTRIC UTILITIES--0.8%
Alabama Power Co., 4.875% Sr. Unsec. Nts., Series N, 9/1/04 2,000,000 2,000,000
- ----------------------------------------------------------------------------------------------------------
Cinergy Corp., 6.25% Unsec. Sub. Debs., 9/1/04 429,000 429,000
- ----------------------------------------------------------------------------------------------------------
DTE Energy Co., 6.45% Sr. Unsub. Nts., 6/1/06 615,000 649,471
- ----------------------------------------------------------------------------------------------------------
MidAmerican Energy Holdings Co., 4.625% Sr. Nts., 10/1/07 910,000 934,837
- ----------------------------------------------------------------------------------------------------------
Niagara Mohawk Power Corp., 5.375% Sr. Unsec. Nts., 10/1/04 2,805,000 2,812,885
- ----------------------------------------------------------------------------------------------------------
Progress Energy, Inc., 6.75% Sr. Nts., 3/1/06 465,000 491,138
-------------
7,317,331
- ----------------------------------------------------------------------------------------------------------
GAS UTILITIES--0.5%
Consolidated Natural Gas Co.:
7.25% Sr. Unsec. Nts., 10/1/04 2,300,000 2,309,200
7.375% Unsec. Debs., 4/1/05 1,080,000 1,111,904
- ----------------------------------------------------------------------------------------------------------
NiSource Finance Corp., 3.20% Nts., 11/1/06 680,000 680,095
-------------
4,101,199
- ----------------------------------------------------------------------------------------------------------
MULTI-UTILITIES & UNREGULATED POWER--0.1%
Duke Energy Corp., 8.25% Nts., 10/15/04 900,000 905,673
-------------
Total Corporate Bonds and Notes (Cost $253,442,074) 254,029,823
27 | OPPENHEIMER REAL ASSET FUND
STATEMENT OF INVESTMENTS Continued
- --------------------------------------------------------------------------------
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- ------------------------------------------------------------------------------------------------------------
STRUCTURED NOTES--14.2%
- ------------------------------------------------------------------------------------------------------------
AB Svensk Exportkredit, Goldman Sachs Commodity Index Excess
Return Linked Nts., 0.48%, 12/2/04 10 $ 13,000,000 $ 20,839,000
- ------------------------------------------------------------------------------------------------------------
AIG:
Goldman Sachs Commodity Index Total Return Linked Nts., 1.17%, 1/28/05 10 15,000,000 19,443,013
Goldman Sachs Commodity Index Total Return Linked Nts., 2.295%, 11/2/05 10 15,000,000 14,464,100
- ------------------------------------------------------------------------------------------------------------
Cargill, Inc.:
Goldman Sachs Commodity Index Total Return Linked Nts., 1.098%, 3/18/05 10 18,000,000 20,030,881
Goldman Sachs Commodity Index Total Return Linked Nts., 1.189%, 3/4/05 10 23,000,000 31,418,090
- ------------------------------------------------------------------------------------------------------------
Core Investment Grade Bond Trust I, Pass-Through Certificates,
Series 2002-1, 4.727%, 11/30/07 9,700,000 10,124,036
- ------------------------------------------------------------------------------------------------------------
Koch Supply & Trading LP, Goldman Sachs Energy Total Return Linked
Nts., 1.70%, 5/3/05 3,10 7,000,000 8,818,908
-------------
Total Structured Notes (Cost $100,866,611) 125,138,028
- ------------------------------------------------------------------------------------------------------------
MUNICIPAL BONDS AND NOTES--0.3%
- ------------------------------------------------------------------------------------------------------------
TX Public Finance Authority Revenue Bonds, Unemployment
Compensation-B, 2%, 6/15/05 (Cost $2,493,569) 2,500,000 2,496,675
- ------------------------------------------------------------------------------------------------------------
SHORT-TERM NOTES--11.7%
- ------------------------------------------------------------------------------------------------------------
Barton Capital Corp., 1.53%, 9/17/04 11 5,000,000 4,996,600
- ------------------------------------------------------------------------------------------------------------
Bryant Park Funding LLC, 1.55%, 10/1/04 11 5,000,000 4,993,542
- ------------------------------------------------------------------------------------------------------------
Cooperative Assn. of Tractor Dealers, Inc., Series A, 1.65%, 10/26/04 5,000,000 4,987,396
- ------------------------------------------------------------------------------------------------------------
Crown Point Capital Co., 1.60%, 10/5/04 11 5,000,000 4,992,444
- ------------------------------------------------------------------------------------------------------------
Federal Home Loan Board, 1.77%, 10/27/04 1,827,000 1,822,078
- ------------------------------------------------------------------------------------------------------------
Federal National Mortgage Assn., 1.58%, 10/27/04 28,000,000 27,930,295
- ------------------------------------------------------------------------------------------------------------
Gemini Securitization Corp., 1.62%, 10/1/04 11 5,000,000 4,993,417
- ------------------------------------------------------------------------------------------------------------
Gotham Funding Corp., 1.59%, 9/16/04 11 5,000,000 4,996,688
- ------------------------------------------------------------------------------------------------------------
Grampian Funding LLC, 1.52%, 9/9/04 11 5,000,000 4,998,311
- ------------------------------------------------------------------------------------------------------------
K2 (USA) LLC, 1.55%, 10/20/04 11 5,000,000 4,989,383
- ------------------------------------------------------------------------------------------------------------
Lexington Parker Capital Co. LLC, 1.53%, 9/16/04 11 5,000,000 4,996,771
- ------------------------------------------------------------------------------------------------------------
Neptune Funding Corp., 1.59%, 9/28/04 11 5,000,000 4,994,038
- ------------------------------------------------------------------------------------------------------------
Perry Global Funding LLC, Series A, 1.55%, 9/22/04 11 4,014,000 4,010,371
- ------------------------------------------------------------------------------------------------------------
Regency Markets No. 1 LLC, 1.59%, 9/30/04 11 5,000,000 4,993,797
- ------------------------------------------------------------------------------------------------------------
Sheffield Receivables Corp., 1.48%, 9/3/04 11 5,000,000 4,999,589
- ------------------------------------------------------------------------------------------------------------
Solitaire Funding LLC, 1.42%, 9/1/04 11 5,000,000 5,000,000
- ------------------------------------------------------------------------------------------------------------
Windmill Funding Corp., 1.60%, 10/8/04 11 5,000,000 4,991,778
-------------
Total Short-Term Notes (Cost $103,686,504) 103,686,498
28 | OPPENHEIMER REAL ASSET FUND
PRINCIPAL VALUE
AMOUNT SEE NOTE 1
- --------------------------------------------------------------------------------------------------------------------
JOINT REPURCHASE AGREEMENTS--2.2%
- --------------------------------------------------------------------------------------------------------------------
Undivided interest of 2.37% in joint repurchase agreement (Principal Amount/
Value $806,836,000, with a maturity value of $806,870,963) with UBS Warburg
LLC, 1.56%, dated 8/31/04, to be repurchased at $19,138,829 on 9/1/04,
collateralized by Federal National Mortgage Assn., 5%, 3/1/34, with a
value of $824,829,716 (Cost $19,138,000) $19,138,000 $ 19,138,000
- --------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS, AT VALUE (COST $1,190,849,309) 137.7% 1,215,074,274
- --------------------------------------------------------------------------------------------------------------------
LIABILITIES IN EXCESS OF OTHER ASSETS (37.7) (332,373,343)
--------------------------------
NET ASSETS 100.0% $ 882,700,931
================================
FOOTNOTES TO STATEMENT OF INVESTMENTS
1. All or a portion of the security is held in collateralized accounts to cover
initial margin requirements on open futures sales contracts with an aggregate
market value of $51,757,180. See Note 5 of Notes to Financial Statements.
2. Illiquid security. See Note 8 of Notes to Financial Statements.
3. Represents the current interest rate for a variable or increasing rate
security.
4. When-issued security or forward commitment to be delivered and settled after
August 31, 2004. See Note 1 of Notes to Financial Statements.
5. Interest-Only Strips represent the right to receive the monthly interest
payments on an underlying pool of mortgage loans. These securities typically
decline in price as interest rates decline. Most other fixed income securities
increase in price when interest rates decline. The principal amount of the
underlying pool represents the notional amount on which current interest is
calculated. The price of these securities is typically more sensitive to changes
in prepayment rates than traditional mortgage-backed securities (for example,
GNMA pass-throughs). Interest rates disclosed represent current yields based
upon the current cost basis and estimated timing and amount of future cash
flows. These securities amount to $423,559 or 0.05% of the Fund's net assets as
of August 31, 2004.
6. A sufficient amount of liquid assets has been designated to cover outstanding
written call options, as follows:
CONTRACTS EXPIRATION EXERCISE PREMIUM VALUE
SUBJECT TO CALL DATES PRICE RECEIVED SEE NOTE 1
- ---------------------------------------------------------------------------------------------
Soybean Futures, 11/12/04 30 9/24/04 $ 700 $ 6,638 $11,250
Soybean Futures, 11/12/04 60 9/24/04 720 12,524 15,750
---------------------
$19,162 $27,000
=====================
7. A sufficient amount of securities has been designated to cover outstanding
written put options, as follows:
CONTRACTS EXPIRATION EXERCISE PREMIUM VALUE
SUBJECT TO CALL DATES PRICE RECEIVED SEE NOTE 1
- --------------------------------------------------------------------------------------------
Cocoa Futures, 12/14/04 30 9/3/04 $ 450 $ 3,188 $ 300
Cocoa Futures, 12/14/04 30 9/3/04 550 1,988 300
Corn Futures, 12/14/04 40 9/24/04 220 2,850 2,500
--------------------
$ 8,026 $ 3,100
====================
29 | OPPENHEIMER REAL ASSET FUND
STATEMENT OF INVESTMENTS Continued
- --------------------------------------------------------------------------------
FOOTNOTES TO STATEMENT OF INVESTMENTS Continued
8. Represents securities sold under Rule 144A, which are exempt from
registration under the Securities Act of 1933, as amended. These securities have
been determined to be liquid under guidelines established by the Board of
Trustees. These securities amount to $12,319,855 or 1.40% of the Fund's net
assets as of August 31, 2004.
9. Zero coupon bond reflects effective yield on the date of purchase.
10. Security is linked to the Goldman Sachs Commodity Index, the Goldman Sachs
Commodity Excess Return Index or the Goldman Sachs Commodity Index Total Return
Index. The indexes currently contain twenty-six commodities from the sectors of
energy, metals and agricultural products. Individual components qualify for the
inclusion in the index based on liquidity and are weighted by their respective
world production quantities.
11. Security issued in an exempt transaction without registration under the
Securities Act of 1933. Such securities amount to $68,946,729, or 7.81% of the
Fund's net assets, and have been determined to be liquid pursuant to guidelines
adopted by the Board of Trustees.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
30 | OPPENHEIMER REAL ASSET FUND
STATEMENT OF ASSETS AND LIABILITIES August 31, 2004
- --------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------
ASSETS
- ---------------------------------------------------------------------------------------------------------
Investments, at value (cost $1,190,849,309)--see accompanying statement of investments $1,215,074,274
- ---------------------------------------------------------------------------------------------------------
Unrealized appreciation on swap contracts 311,698
- ---------------------------------------------------------------------------------------------------------
Receivables and other assets:
Investments sold (including $117,003,441 sold on a
when-issued basis or forward commitment) 117,290,020
Interest 7,411,944
Shares of beneficial interest sold 5,507,175
Other 8,240
---------------
Total assets 1,345,603,351
- ---------------------------------------------------------------------------------------------------------
LIABILITIES
- ---------------------------------------------------------------------------------------------------------
Bank overdraft 672,572
- ---------------------------------------------------------------------------------------------------------
Options written, at value (premiums received $27,188)
- --see accompanying statement of investments 30,100
- ---------------------------------------------------------------------------------------------------------
Payables and otherb liabilities:
Investments purchased (including $442,231,512 purchased on
a when-issued basis or forward commitment) 452,346,976
Shares of beneficial interest redeemed 5,306,667
Futures margins 3,881,025
Distribution and service plan fees 332,024
Transfer and shareholder servicing agent fees 136,948
Shareholder communications 91,579
Trustees' compensation 9,006
Other 95,523
---------------
Total liabilities 462,902,420
- ---------------------------------------------------------------------------------------------------------
NET ASSETS $ 882,700,931
===============
- ---------------------------------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS
- ---------------------------------------------------------------------------------------------------------
Par value of shares of beneficial interest $ 96,928
- ---------------------------------------------------------------------------------------------------------
Additional paid-in capital 797,998,462
- ---------------------------------------------------------------------------------------------------------
Accumulated net investment income 277,611
- ---------------------------------------------------------------------------------------------------------
Accumulated net realized gain on investments 83,911,731
- ---------------------------------------------------------------------------------------------------------
Net unrealized appreciation on investments 416,199
---------------
NET ASSETS $ 882,700,931
===============
31 | OPPENHEIMER REAL ASSET FUND
STATEMENT OF ASSETS AND LIABILITIES Continued
- --------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------
NET ASSET VALUE PER SHARE
- -----------------------------------------------------------------------------------------------------------
Class A Shares:
Net asset value and redemption price per share (based on net assets of $638,254,035 and
69,930,807 shares of beneficial interest outstanding) $9.13
Maximum offering price per share (net asset value plus sales charge of 5.75% of offering price) $9.69
- -----------------------------------------------------------------------------------------------------------
Class B Shares:
Net asset value, redemption price (excludes applicable contingent deferred sales charge)
and offering price per share (based on net assets of $78,125,449 and 8,634,973 shares
of beneficial interest outstanding) $9.05
- -----------------------------------------------------------------------------------------------------------
Class C Shares:
Net asset value, redemption price (excludes applicable contingent deferred sales charge)
and offering price per share (based on net assets of $110,728,402 and 12,281,455 shares
of beneficial interest outstanding) $9.02
- -----------------------------------------------------------------------------------------------------------
Class N Shares:
Net asset value, redemption price (excludes applicable contingent deferred sales charge)
and offering price per share (based on net assets of $8,205,680 and 904,148 shares of
beneficial interest outstanding) $9.08
- -----------------------------------------------------------------------------------------------------------
Class Y Shares:
Net asset value, redemption price and offering price per share (based on net assets of
$47,387,365 and 5,176,596 shares of beneficial interest outstanding) $9.15
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
32 | OPPENHEIMER REAL ASSET FUND
STATEMENT OF OPERATIONS For the Year Ended August 31, 2004
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
INVESTMENT INCOME
- --------------------------------------------------------------------------------
Interest $ 9,196,869
- --------------------------------------------------------------------------------
EXPENSES
- --------------------------------------------------------------------------------
Management fees 5,195,892
- --------------------------------------------------------------------------------
Distribution and service plan fees:
Class A 996,627
Class B 521,169
Class C 680,001
Class N 22,399
- --------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees:
Class A 796,965
Class B 173,759
Class C 185,947
Class N 16,414
Class Y 10,381
- --------------------------------------------------------------------------------
Shareholder
communications:
Class A 104,357
Class B 31,494
Class C 25,977
Class N 1,814
- --------------------------------------------------------------------------------
Custodian fees and expenses 31,634
- --------------------------------------------------------------------------------
Trustees' compensation 17,141
- --------------------------------------------------------------------------------
Other 101,977
-----------
Total expenses 8,913,948
Less reduction to custodian expenses (27,493)
Less payments and waivers of expenses (11,599)
-----------
Net expenses 8,874,856
- --------------------------------------------------------------------------------
NET INVESTMENT INCOME 322,013
33 | OPPENHEIMER REAL ASSET FUND
STATEMENT OF OPERATIONS Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS)
- --------------------------------------------------------------------------------
Net realized gain on:
Investments (including premiums on options exercised) $ 51,597,136
Closing of futures contracts 79,806,088
Closing and expiration of option contracts written 722,842
Swap contracts 8,232,810
--------------
Net realized gain 140,358,876
- --------------------------------------------------------------------------------
Net change in unrealized appreciation (depreciation) on:
Investments (4,204,438)
Futures contracts (27,501,835)
Option contracts (9,221)
Swap contracts 311,698
-------------
Net change in unrealized appreciation (31,403,796)
- --------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 109,277,093
==============
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
34 | OPPENHEIMER REAL ASSET FUND
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
YEAR ENDED AUGUST 31, 2004 2003
- ----------------------------------------------------------------------------------------------------------------
OPERATIONS
- ----------------------------------------------------------------------------------------------------------------
Net investment income $ 322,013 $ 783,826
- ----------------------------------------------------------------------------------------------------------------
Net realized gain 140,358,876 29,067,435
- ----------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation (31,403,796) 21,272,368
---------------------------------
Net increase in net assets resulting from operations 109,277,093 51,123,629
- ----------------------------------------------------------------------------------------------------------------
DIVIDENDS AND/OR DISTRIBUTIONS TO SHAREHOLDERS
- ----------------------------------------------------------------------------------------------------------------
Dividends from net investment income:
Class A (51,684) (1,303,888)
Class B -- (43,213)
Class C -- (29,456)
Class N -- (6,191)
Class Y (64,204) (148,718)
- ----------------------------------------------------------------------------------------------------------------
Distributions from net realized gain:
Class A (9,145,151) --
Class B (1,194,188) --
Class C (1,409,006) --
Class N (77,055) --
Class Y (793,204) --
- ----------------------------------------------------------------------------------------------------------------
BENEFICIAL INTEREST TRANSACTIONS
- ----------------------------------------------------------------------------------------------------------------
Net increase in net assets resulting from beneficial interest transactions:
Class A 328,433,627 54,035,053
Class B 31,994,068 7,287,354
Class C 63,172,169 15,042,430
Class N 5,907,317 1,134,147
Class Y 16,401,022 14,764,802
- ----------------------------------------------------------------------------------------------------------------
NET ASSETS
- ----------------------------------------------------------------------------------------------------------------
Total increase 542,450,804 141,855,949
- ----------------------------------------------------------------------------------------------------------------
Beginning of period 340,250,127 198,394,178
---------------------------------
End of period (including accumulated net investment income
of $277,611 and $73,631, respectively) $ 882,700,931 $ 340,250,127
=================================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
35 | OPPENHEIMER REAL ASSET FUND
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
CLASS A YEAR ENDED AUGUST 31, 2004 2003 2002 2001 2000
- -----------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- -----------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 7.51 $ 6.15 $ 6.93 $ 8.18 $ 5.74
- -----------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .01 .03 .29 .45 .32
Net realized and unrealized gain (loss) 1.85 1.38 (.71) (1.21) 2.40
----------------------------------------------------------------------
Total from investment operations 1.86 1.41 (.42) (.76) 2.72
- -----------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income -- 1 (.05) (.36) (.43) (.28)
Distributions from net realized gain (.24) -- -- (.06) --
----------------------------------------------------------------------
Total dividends and/or distributions
to shareholders (.24) (.05) (.36) (.49) (.28)
- -----------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 9.13 $ 7.51 $ 6.15 $ 6.93 $ 8.18
======================================================================
- -----------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 2 25.44% 23.08% (5.54)% (9.83)% 48.55%
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- -----------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $638,254 $238,828 $148,319 $117,331 $161,547
- -----------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $413,618 $193,837 $115,458 $139,631 $126,143
- -----------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment income 0.22% 0.46% 4.73% 5.73% 4.81%
Total expenses 1.40% 4,5 1.49% 4 1.68% 4,5 1.51% 4 1.50% 4
- -----------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 87% 61% 49% 105% 93%
1. Less than $0.005 per share.
2. Assumes an investment on the business day before the first day of the fiscal
period, with all dividends and distributions reinvested in additional shares on
the reinvestment date, and redemption at the net asset value calculated on the
last business day of the fiscal period. Sales charges are not reflected in the
total returns. Total returns are not annualized for periods of less than one
full year. Returns do not reflect the deduction of taxes that a shareholder
would pay on Fund distributions or the redemption of Fund shares.
3. Annualized for periods of less than one full year.
4. Reduction to custodian expenses less than 0.01%.
5. Voluntary waiver of transfer agent fees less than 0.01%.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
36 | OPPENHEIMER REAL ASSET FUND
CLASS B YEAR ENDED AUGUST 31, 2004 2003 2002 2001 2000
- ----------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- ----------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 7.51 $ 6.16 $ 6.95 $ 8.20 $ 5.75
- ----------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss) (.05) (.04) .23 .40 .27
Net realized and unrealized gain (loss) 1.83 1.40 (.70) (1.22) 2.40
--------------------------------------------------------------------
Total from investment operations 1.78 1.36 (.47) (.82) 2.67
- ----------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income -- (.01) (.32) (.37) (.22)
Distributions from net realized gain (.24) -- -- (.06) --
--------------------------------------------------------------------
Total dividends and/or distributions
to shareholders (.24) (.01) (.32) (.43) (.22)
- ----------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 9.05 $ 7.51 $ 6.16 $ 6.95 $ 8.20
====================================================================
- ----------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 1 24.32% 22.12% (6.38)% (10.49)% 47.44%
- ----------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ----------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $ 78,125 $ 37,589 $ 24,738 $ 21,321 $ 27,156
- ----------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 52,436 $ 32,101 $ 20,032 $ 26,295 $ 21,416
- ----------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 2
Net investment income (loss) (0.69)% (0.41)% 4.10% 4.99% 4.03%
Total expenses 2.32% 2.44% 2.45% 2.27% 2.27%
Expenses after payments and waivers
and reduction to custodian expenses 2.31% 2.36% N/A 3,4 N/A 3 N/A 3
- ----------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 87% 61% 49% 105% 93%
1. Assumes an investment on the business day before the first day of the fiscal
period, with all dividends and distributions reinvested in additional shares on
the reinvestment date, and redemption at the net asset value calculated on the
last business day of the fiscal period. Sales charges are not reflected in the
total returns. Total returns are not annualized for periods of less than one
full year. Returns do not reflect the deduction of taxes that a shareholder
would pay on Fund distributions or the redemption of Fund shares.
2. Annualized for periods of less than one full year.
3. Reduction to custodian expenses less than 0.01%.
4. Voluntary waiver of transfer agent fees less than 0.01%.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
37 | OPPENHEIMER REAL ASSET FUND
FINANCIAL HIGHLIGHTS Continued
- --------------------------------------------------------------------------------
CLASS C YEAR ENDED AUGUST 31, 2004 2003 2002 2001 2000
- ---------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- ---------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 7.48 $ 6.14 $ 6.93 $ 8.17 $ 5.73
- ---------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss) (.03) (.03) .23 .41 .27
Net realized and unrealized gain (loss) 1.81 1.38 (.70) (1.22) 2.39
---------------------------------------------------------------
Total from investment operations 1.78 1.35 (.47) (.81) 2.66
Dividends and/or distributions to shareholders:
Dividends from net investment income -- (.01) (.32) (.37) (.22)
Distributions from net realized gain (.24) -- -- (.06) --
---------------------------------------------------------------
Total dividends and/or distributions
to shareholders (.24) (.01) (.32) (.43) (.22)
- ---------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 9.02 $ 7.48 $ 6.14 $ 6.93 $ 8.17
===============================================================
- ---------------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 1 24.42% 22.04% (6.39)% (10.43)% 47.43%
- ---------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ---------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $110,728 $36,531 $18,115 $12,588 $20,256
- ---------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 68,392 $25,746 $11,771 $16,165 $16,536
- ---------------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 2
Net investment income (loss) (0.62)% (0.43)% 3.99% 4.95% 4.03%
Total expenses 2.24% 2.40% 2.45% 2.26% 2.27%
Expenses after payments and waivers
and reduction to custodian expenses N/A 3 2.36% N/A 3,4 N/A 3 N/A 3
- ---------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 87% 61% 49% 105% 93%
1. Assumes an investment on the business day before the first day of the fiscal
period, with all dividends and distributions reinvested in additional shares on
the reinvestment date, and redemption at the net asset value calculated on the
last business day of the fiscal period. Sales charges are not reflected in the
total returns. Total returns are not annualized for periods of less than one
full year. Returns do not reflect the deduction of taxes that a shareholder
would pay on Fund distributions or the redemption of Fund shares.
2. Annualized for periods of less than one full year.
3. Reduction to custodian expenses less than 0.01%.
4. Voluntary waiver of transfer agent fees less than 0.01%.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
38 | OPPENHEIMER REAL ASSET FUND
CLASS N YEAR ENDED AUGUST 31, 2004 2003 2002 2001 1
- ---------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- ---------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 7.50 $ 6.15 $ 6.99 $ 7.67
- ---------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income -- .07 .30 .22
Net realized and unrealized gain (loss) 1.82 1.36 (.78) (.73)
------------------------------------------------
Total from investment operations 1.82 1.43 (.48) (.51)
- ---------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income -- (.08) (.36) (.17)
Distributions from net realized gain (.24) -- -- --
------------------------------------------------
Total dividends and/or distributions
to shareholders (.24) (.08) (.36) (.17)
- ---------------------------------------------------------------------------------------------------
Net asset value, end of period $ 9.08 $ 7.50 $ 6.15 $ 6.99
================================================
- ---------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 2 24.90% 23.63% (6.47)% (6.75)%
- ---------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ---------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $8,206 $1,578 $ 314 $ 61
- ---------------------------------------------------------------------------------------------------
Average net assets (in thousands) $4,516 $1,001 $ 146 $ 14
- ---------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment income (loss) (0.17)% 0.27% 3.57% 5.95%
Total expenses 1.84% 1.83% 1.94% 1.88%
Expenses after payments and waivers
and reduction to custodian expenses 1.80% 1.63% N/A 4,5 N/A 4
- ---------------------------------------------------------------------------------------------------
Portfolio turnover rate 87% 61% 49% 105%
1. For the period from March 1, 2001 (inception of offering) to August 31, 2001.
2. Assumes an investment on the business day before the first day of the fiscal
period, with all dividends and distributions reinvested in additional shares on
the reinvestment date, and redemption at the net asset value calculated on the
last business day of the fiscal period. Sales charges are not reflected in the
total returns. Total returns are not annualized for periods of less than one
full year. Returns do not reflect the deduction of taxes that a shareholder
would pay on Fund distributions or the redemption of Fund shares.
3. Annualized for periods of less than one full year.
4. Reduction to custodian expenses less than 0.01%.
5. Voluntary waiver of transfer agent fees less than 0.01%.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
39 | OPPENHEIMER REAL ASSET FUND
FINANCIAL HIGHLIGHTS Continued
- --------------------------------------------------------------------------------
CLASS Y YEAR ENDED AUGUST 31, 2004 2003 2002 2001 2000
- ------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING DATA
- ------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 7.52 $ 6.15 $ 6.94 $ 8.16 $ 5.72
- ------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income .05 .06 .32 .25 .36
Net realized and unrealized gain (loss) 1.84 1.39 (.73) (.95) 2.38
---------------------------------------------------------
Total from investment operations 1.89 1.45 (.41) (.70) 2.74
Dividends and/or distributions to shareholders:
Dividends from net investment income (.02) (.08) (.38) (.46) (.30)
Distributions from net realized gain (.24) -- -- (.06) --
---------------------------------------------------------
Total dividends and/or distributions
to shareholders (.26) (.08) (.38) (.52) (.30)
- ------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 9.15 $ 7.52 $ 6.15 $ 6.94 $ 8.16
=========================================================
- ------------------------------------------------------------------------------------------------------------
TOTAL RETURN, AT NET ASSET VALUE 1 25.84% 23.69% (5.36)% (9.21)% 49.20%
- ------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $47,387 $25,724 $6,908 $1,741 $ 1
- ------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $31,449 $15,755 $3,420 $ 868 $ 1
- ------------------------------------------------------------------------------------------------------------
Ratios to average net assets: 2
Net investment income 0.65% 0.83% 3.95% 6.46% 5.28%
Total expenses 0.97% 1.08% 1.27% 1.38% 3 1.09%
Expenses after payments and waivers
and reduction to custodian expenses N/A 4 N/A 4 1.26% 1.17% N/A 4
- ------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 87% 61% 49% 105% 93%
1. Assumes an investment on the business day before the first day of the fiscal
period, with all dividends and distributions reinvested in additional shares on
the reinvestment date, and redemption at the net asset value calculated on the
last business day of the fiscal period. Sales charges are not reflected in the
total returns. Total returns are not annualized for periods of less than one
full year. Returns do not reflect the deduction of taxes that a shareholder
would pay on Fund distributions or the redemption of Fund shares.
2. Annualized for periods of less than one full year.
3. Added since August 31, 2001 to reflect expenses before reduction to custodian
expenses and voluntary waiver of transfer agent fees.
4. Reduction to custodian expenses less than 0.01%.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
40 | OPPENHEIMER REAL ASSET FUND
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES
Oppenheimer Real Asset Fund (the Fund) is a non-diversified, open-end management
investment company registered under the Investment Company Act of 1940, as
amended. The Fund's investment objective is to seek total return. The Fund's
investment advisor is OppenheimerFunds, Inc. (the Advisor). The Sub-Advisor is
Oppenheimer Real Asset Management, Inc. (the Manager), a wholly owned subsidiary
of the Advisor.
The Fund offers Class A, Class B, Class C, Class N and Class Y shares.
Class A shares are sold at their offering price, which is normally net asset
value plus a front-end sales charge. Class B, Class C and Class N shares are
sold without a front-end sales charge but may be subject to a contingent
deferred sales charge (CDSC). Class N shares are sold only through retirement
plans. Retirement plans that offer Class N shares may impose charges on those
accounts. Class Y shares are sold to certain institutional investors without
either a front-end sales charge or a CDSC, however, the institutional investor
may impose charges on those accounts. All classes of shares have identical
rights and voting privileges with respect to the Fund in general and exclusive
voting rights on matters that affect that class alone. Earnings, net assets and
net asset value per share may differ due to each class having its own expenses,
such as transfer and shareholder servicing agent fees and shareholder
communications, directly attributable to that class. Class A, B, C and N have
separate distribution and/or service plans. No such plan has been adopted for
Class Y shares. Class B shares will automatically convert to Class A shares six
years after the date of purchase. The Fund assesses a 2% fee on the proceeds of
fund shares that are redeemed (either by selling or exchanging to another
Oppenheimer fund) within 30 days of their purchase. The fee, which is retained
by the Fund, is accounted for as an addition to paid-in capital.
The following is a summary of significant accounting policies consistently
followed by the Fund.
- --------------------------------------------------------------------------------
SECURITIES VALUATION. The Fund calculates the net asset value of its shares as
of the close of The New York Stock Exchange (the Exchange), normally 4:00 P.M.
Eastern time, on each day the Exchange is open for business. Securities listed
or traded on National Stock Exchanges or other domestic or foreign exchanges are
valued based on the last sale price of the security traded on that exchange
prior to the time when the Fund's assets are valued. Securities traded on NASDAQ
are valued based on the closing price provided by NASDAQ prior to the time when
the Fund's assets are valued. In the absence of a sale, the security is valued
at the last sale price on the prior trading day, if it is within the spread of
the closing bid and asked prices, and if not, at the closing bid price.
Corporate, government and municipal debt instruments having a remaining maturity
in excess of 60 days and all mortgage-backed securities will be valued at the
mean between the "bid" and "asked" prices. Securities may be valued primarily
using dealer-supplied valuations or a portfolio pricing service authorized by
the Board of Trustees. Securities (including restricted securities) for which
market quotations are not readily available are valued at their fair value.
Foreign and domestic securities whose values have been materially
41 | OPPENHEIMER REAL ASSET FUND
NOTES TO FINANCIAL STATEMENTS Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES Continued
affected by what the Manager identifies as a significant event occurring before
the Fund's assets are valued but after the close of their respective exchanges
will be fair valued. Fair value is determined in good faith using consistently
applied procedures under the supervision of the Board of Trustees. Short-term
"money market type" debt securities with remaining maturities of sixty days or
less are valued at amortized cost (which approximates market value).
- --------------------------------------------------------------------------------
STRUCTURED NOTES. The Fund invests in structured notes whose market values,
interest rates and/or redemption prices are linked to the performance of
underlying foreign currencies, interest rate spreads, stock market indices,
prices of individual securities, commodities or other financial instruments or
the occurrence of other specific events. The structured notes are often
leveraged, increasing the volatility of each note's market value relative to the
change in the underlying linked financial element or event. Fluctuations in
value of these securities are recorded as unrealized gains and losses in the
accompanying financial statements. The Fund records a realized gain or loss when
a structured note is sold or matures. As of August 31, 2004, the market value of
these securities comprised 14.2% of the Fund's net assets and resulted in
unrealized cumulative gains of $24,271,417.
- --------------------------------------------------------------------------------
SECURITIES ON A WHEN-ISSUED BASIS OR FORWARD COMMITMENT. Delivery and payment
for securities that have been purchased by the Fund on a when-issued basis or
forward commitment can take place up to ten days or more after the trade date.
Normally the settlement date occurs within six months after the trade date;
however, the Fund may, from time to time, purchase securities whose settlement
date extends six months or more beyond trade date. During this period, such
securities do not earn interest, are subject to market fluctuation and may
increase or decrease in value prior to their delivery. The Fund maintains
internally designated assets with a market value equal to or greater than the
amount of its purchase commitments. The purchase of securities on a when-issued
basis or forward commitment may increase the volatility of the Fund's net asset
value to the extent the Fund executes such transactions while remaining
substantially fully invested. The Fund may also sell securities that it
purchased on a when-issued basis or forward commitment prior to settlement of
the original purchase. As of August 31, 2004, the Fund had purchased
$442,231,512 of securities on a when-issued basis or forward commitment and sold
$117,003,441 of securities issued on a when-issued basis or forward commitment.
In connection with its ability to purchase or sell securities on a
when-issued basis, the Fund may enter into forward roll transactions with
respect to mortgage-related securities. Forward roll transactions require the
sale of securities for delivery in the current month, and a simultaneous
agreement with the same counterparty to repurchase similar (same type, coupon
and maturity) but not identical securities on a specified future date. The Fund
records the incremental difference between the forward purchase and sale of each
forward roll as realized gain (loss) on investments or as fee income in the case
of such
42 | OPPENHEIMER REAL ASSET FUND
transactions that have an associated fee in lieu of a difference in the forward
purchase and sale price.
Risks of entering into forward roll transactions include the potential
inability of the counterparty to meet the terms of the agreement; the potential
of the Fund to receive inferior securities at redelivery as compared to the
securities sold to the counterparty; counterparty credit risk; and the potential
pay down speed variance between the mortgage-related pools.
- --------------------------------------------------------------------------------
JOINT REPURCHASE AGREEMENTS. Pursuant to an Exemptive Order issued by the
Securities and Exchange Commission, the Fund, along with other affiliated funds
advised by the Manager, may transfer uninvested cash balances into joint trading
accounts on a daily basis. These balances are invested in one or more repurchase
agreements. Securities pledged as collateral for repurchase agreements are held
by a custodian bank until the agreements mature. Each agreement requires that
the market value of the collateral be sufficient to cover payments of interest
and principal. In the event of default by the other party to the agreement,
retention of the collateral may be subject to legal proceedings.
- --------------------------------------------------------------------------------
ALLOCATION OF INCOME, EXPENSES, GAINS AND LOSSES. Income, expenses (other than
those attributable to a specific class), gains and losses are allocated on a
daily basis to each class of shares based upon the relative proportion of net
assets represented by such class. Operating expenses directly attributable to a
specific class are charged against the operations of that class.
- --------------------------------------------------------------------------------
FEDERAL TAXES. The Fund intends to comply with provisions of the Internal
Revenue Code applicable to regulated investment companies and to distribute
substantially all of its investment company taxable income, including any net
realized gain on investments not offset by capital loss carryforwards, if any,
to shareholders, therefore, no federal income or excise tax provision is
required.
The tax components of capital shown in the table below represent distribution
requirements the Fund must satisfy under the income tax regulations, losses the
Fund may be able to offset against income and gains realized in future years and
unrealized appreciation or depreciation of securities and other investments for
federal income tax purposes.
NET UNREALIZED
APPRECIATION
BASED ON COST OF
SECURITIES AND
UNDISTRIBUTED UNDISTRIBUTED ACCUMULATED OTHER INVESTMENTS
NET INVESTMENT LONG-TERM LOSS FOR FEDERAL INCOME
INCOME GAIN CARRYFORWARD 1,2,3 TAX PURPOSES
- --------------------------------------------------------------------------------
$34,836,643 $53,416,727 $24,036,296 $20,462,918
1. The Fund had $24,036,296 of straddle losses which were deferred.
2. During the fiscal year ended August 31, 2004, the Fund did not utilize any
capital loss carryforward.
3. During the fiscal year ended August 31, 2003, the Fund utilized $27,556,670
of capital loss carryforward to offset capital gains realized in that fiscal
year.
43 | OPPENHEIMER REAL ASSET FUND
NOTES TO FINANCIAL STATEMENTS Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES Continued
Net investment income (loss) and net realized gain (loss) may differ for
financial statement and tax purposes. The character of dividends and
distributions made during the fiscal year from net investment income or net
realized gains may differ from their ultimate characterization for federal
income tax purposes. Also, due to timing of dividends and distributions, the
fiscal year in which amounts are distributed may differ from the fiscal year in
which the income or net realized gain was recorded by the Fund. Accordingly, the
following amounts have been reclassified for August 31, 2004. Net assets of the
Fund were unaffected by the reclassifications.
REDUCTION TO REDUCTION TO
ACCUMULATED ACCUMULATED NET
INCREASE TO NET INVESTMENT REALIZED GAIN
PAID-IN CAPITAL INCOME ON INVESTMENTS 4
-------------------------------------------------------
$22,298,093 $2,145 $22,295,948
4. $22,240,388, including $13,513,420 of long-term capital gain, was distributed
in connection with Fund share redemptions.
The tax character of distributions paid during the years ended August 31, 2004
and August 31, 2003 was as follows:
YEAR ENDED YEAR ENDED
AUGUST 31, 2004 AUGUST 31, 2003
--------------------------------------------------------------
Distributions paid from:
Ordinary income $ 115,888 $1,531,466
Long-term capital gain 12,618,604 --
------------------------------
Total $12,734,492 $1,531,466
==============================
The aggregate cost of securities and other investments and the composition of
unrealized appreciation and depreciation of securities and other investments for
federal income tax purposes as of August 31, 2004 are noted below. The primary
difference between book and tax appreciation or depreciation of securities and
other investments, if applicable, is attributable to the tax deferral of losses
or tax realization of financial statement unrealized gain or loss.
Federal tax cost of securities $1,190,849,309
Federal tax cost of other investments 12,972,097
--------------
Total federal tax cost $1,203,821,406
==============
Gross unrealized appreciation $ 28,527,637
Gross unrealized depreciation (8,064,719)
Net unrealized appreciation $ 20,462,918
==============
- --------------------------------------------------------------------------------
TRUSTEES' COMPENSATION. The Board of Trustees has adopted a deferred
compensation plan for independent trustees that enables trustees to elect to
defer receipt of all or a portion of the annual compensation they are entitled
to receive from the Fund. For purposes of determining the amount owed to the
Trustee under the plan, deferred amounts
44 | OPPENHEIMER REAL ASSET FUND
are treated as though equal dollar amounts had been invested in shares of the
Fund or in other Oppenheimer funds selected by the Trustee. The Fund purchases
shares of the funds selected for deferral by the Trustee in amounts equal to his
or her deemed investment, resulting in a Fund asset equal to the deferred
compensation liability. Such assets are included as a component of "Other"
within the asset section of the Statement of Assets and Liabilities. Deferral of
trustees' fees under the plan will not affect the net assets of the Fund, and
will not materially affect the Fund's assets, liabilities or net investment
income per share. Amounts will be deferred until distributed in accordance to
the Plan.
- --------------------------------------------------------------------------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS. Dividends and distributions to
shareholders, which are determined in accordance with income tax regulations,
are recorded on the ex-dividend date. Income distributions, if any, are declared
and paid quarterly. Capital gain distributions, if any, are declared and paid
annually.
- --------------------------------------------------------------------------------
INVESTMENT INCOME. Dividend income is recorded on the ex-dividend date or upon
ex-dividend notification in the case of certain foreign dividends where the
ex-dividend date may have passed. Non-cash dividends included in dividend
income, if any, are recorded at the fair market value of the securities
received. Interest income, which includes accretion of discount and amortization
of premium, is accrued as earned.
- --------------------------------------------------------------------------------
EXPENSE OFFSET ARRANGEMENT. The reduction of custodian fees, if applicable,
represents earnings on cash balances maintained by the Fund.
- --------------------------------------------------------------------------------
SECURITY TRANSACTIONS. Security transactions are recorded on the trade date.
Realized gains and losses on securities sold are determined on the basis of
identified cost.
- --------------------------------------------------------------------------------
OTHER. The preparation of financial statements in conformity with U.S. generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of income and expenses during the reporting
period. Actual results could differ from those estimates.
- --------------------------------------------------------------------------------
2. SHARES OF BENEFICIAL INTEREST
The Fund has authorized an unlimited number of $0.001 par value shares of
beneficial interest of each class. Transactions in shares of beneficial interest
were as follows:
YEAR ENDED AUGUST 31, 2004 YEAR ENDED AUGUST 31, 2003
SHARES AMOUNT SHARES AMOUNT
- ---------------------------------------------------------------------------------------------
CLASS A
Sold 60,864,784 $ 526,237,973 34,470,741 $ 240,879,466
Dividends and/or
distributions reinvested 1,021,225 7,760,573 182,879 1,164,613
Redeemed (23,760,653) (205,564,919) (26,972,700) (188,009,026)
-----------------------------------------------------------------
Net increase 38,125,356 $ 328,433,627 7,680,920 $ 54,035,053
=================================================================
45 | OPPENHEIMER REAL ASSET FUND
NOTES TO FINANCIAL STATEMENTS Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
2. SHARES OF BENEFICIAL INTEREST Continued
YEAR ENDED AUGUST 31, 2004 YEAR ENDED AUGUST 31, 2003
SHARES AMOUNT SHARES AMOUNT
- -----------------------------------------------------------------------------------------
CLASS B
Sold 6,075,661 $ 52,623,081 4,589,002 $ 32,275,935
Dividends and/or
distributions reinvested 136,911 1,037,789 6,070 38,017
Redeemed (2,581,998) (21,666,802) (3,603,595) (25,026,598)
------------------------------------------------------------
Net increase 3,630,574 $ 31,994,068 991,477 $ 7,287,354
============================================================
- -----------------------------------------------------------------------------------------
CLASS C
Sold 10,218,639 $ 87,296,277 6,300,352 $ 44,752,722
Dividends and/or
distributions reinvested 148,152 1,118,549 3,715 23,258
Redeemed (2,968,721) (25,242,657) (4,370,436) (29,733,550)
------------------------------------------------------------
Net increase 7,398,070 $ 63,172,169 1,933,631 $ 15,042,430
============================================================
- -----------------------------------------------------------------------------------------
CLASS N
Sold 818,178 $ 6,975,731 310,503 $ 2,241,096
Dividends and/or
distributions reinvested 10,161 77,023 1,012 6,180
Redeemed (134,749) (1,145,437) (151,980) (1,113,129)
------------------------------------------------------------
Net increase 693,590 $ 5,907,317 159,535 $ 1,134,147
============================================================
- -----------------------------------------------------------------------------------------
CLASS Y
Sold 3,051,718 $ 26,560,158 3,474,505 $ 22,981,857
Dividends and/or
distributions reinvested 28,193 213,586 8,593 56,004
Redeemed (1,324,757) (10,372,722) (1,184,394) (8,273,059)
------------------------------------------------------------
Net increase 1,755,154 $ 16,401,022 2,298,704 $ 14,764,802
============================================================
- --------------------------------------------------------------------------------
3. PURCHASES AND SALES OF SECURITIES
The aggregate cost of purchases and proceeds from sales of securities, other
than U.S. government obligations and short-term obligations, for the year ended
August 31, 2004, were $225,453,250 and $141,469,850, respectively. There were
purchases of $19,847,819 and sales of $19,603,472 of U.S. government and
government agency obligations for the year ended August 31, 2004.
- --------------------------------------------------------------------------------
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES
MANAGEMENT FEES. Management fees paid to the Advisor were in accordance with the
investment advisory agreement with the Fund which provides for a fee at an
annual rate of 1.00% of the first $200 million of average annual net assets,
0.90% of the next $200 million, 0.85% of the next $200 million, 0.80% of the
next $200 million, and 0.75% of net assets in excess of $800 million. Under the
sub-advisory agreement, the Advisor pays the Sub-Advisor the following annual
fees: 0.50% of the first $200 million of average annual
46 | OPPENHEIMER REAL ASSET FUND
net assets, 0.45% of the next $200 million, 0.425% of the next $200 million,
0.40% of the next $200 million, and 0.375% of the net assets in excess of $800
million.
- --------------------------------------------------------------------------------
ADMINISTRATION SERVICES. The Fund pays the Manager a fee of $1,500 per year for
preparing and filing the Fund's tax returns.
- --------------------------------------------------------------------------------
TRANSFER AGENT FEES. OppenheimerFunds Services (OFS), a division of the Manager,
acts as the transfer and shareholder servicing agent for the Fund. The Fund pays
OFS a per account fee. For the year ended August 31, 2004, the Fund paid
$1,105,884 to OFS for services to the Fund.
Additionally, Class Y shares are subject to minimum fees of $10,000 for
assets of $10 million or more. The Class Y shares are subject to the minimum
fees in the event that the per account fee does not equal or exceed the
applicable minimum fees. OFS may voluntarily waive the minimum fees.
- --------------------------------------------------------------------------------
DISTRIBUTION AND SERVICE PLAN (12B-1) FEES. Under its General Distributor's
Agreement with the Fund, OppenheimerFunds Distributor, Inc. (the Distributor)
acts as the Fund's principal underwriter in the continuous public offering of
the Fund's classes of shares.
- --------------------------------------------------------------------------------
SERVICE PLAN FOR CLASS A SHARES. The Fund has adopted a Service Plan for Class A
shares. It reimburses the Distributor for a portion of its costs incurred for
services provided to accounts that hold Class A shares. Reimbursement is made
quarterly at an annual rate of up to 0.25% of the average annual net assets of
Class A shares of the Fund. The Distributor currently uses all of those fees to
pay dealers, brokers, banks and other financial institutions quarterly for
providing personal services and maintenance of accounts of their customers that
hold Class A shares. Any unreimbursed expenses the Distributor incurs with
respect to Class A shares in any fiscal year cannot be recovered in subsequent
years. Fees incurred by the Fund under the Plan are detailed in the Statement of
Operations.
- --------------------------------------------------------------------------------
DISTRIBUTION AND SERVICE PLANS FOR CLASS B, CLASS C AND CLASS N SHARES. The Fund
has adopted Distribution and Service Plans for Class B, Class C and Class N
shares to compensate the Distributor for its services in connection with the
distribution of those shares and servicing accounts. Under the plans, the Fund
pays the Distributor an annual asset-based sales charge of 0.75% per year on
Class B and Class C shares and 0.25% per year on Class N shares. The Distributor
also receives a service fee of up to 0.25% per year under each plan. If either
the Class B, Class C or Class N plan is terminated by the Fund or by the
shareholders of a class, the Board of Trustees and its independent trustees must
determine whether the Distributor shall be entitled to payment from the Fund of
all or a portion of the service fee and/or asset-based sales charge in respect
to shares sold prior to the effective date of such termination. The
Distributor's aggregate uncompensated expenses under the plan at August 31, 2004
for Class B, Class C and Class N shares were $2,777,625, $1,505,400 and
$121,351, respectively. Fees incurred by the Fund under the plans are detailed
in the Statement of Operations.
47 | OPPENHEIMER REAL ASSET FUND
NOTES TO FINANCIAL STATEMENTS Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES Continued
SALES CHARGES. Front-end sales charges and contingent deferred sales charges
(CDSC) do not represent expenses of the Fund. They are deducted from the
proceeds of sales of Fund shares prior to investment or from redemption proceeds
prior to remittance, as applicable. The sales charges retained by the
Distributor from the sale of shares and the CDSC retained by the Distributor on
the redemption of shares is shown in the table below for the period indicated.
CLASS A CLASS B CLASS C CLASS N
CLASS A CONTINGENT CONTINGENT CONTINGENT CONTINGENT
FRONT-END DEFERRED DEFERRED DEFERRED DEFERRED
SALES CHARGES SALES CHARGES SALES CHARGES SALES CHARGES SALES CHARGES
RETAINED BY RETAINED BY RETAINED BY RETAINED BY RETAINED BY
YEAR ENDED DISTRIBUTOR DISTRIBUTOR DISTRIBUTOR DISTRIBUTOR DISTRIBUTOR
- ----------------------------------------------------------------------------------------------------------
August 31, 2004 $735,882 $2,156 $194,545 $91,638 $6,646
- --------------------------------------------------------------------------------
PAYMENTS AND WAIVERS OF EXPENSES. OFS has voluntarily agreed to limit transfer
and shareholder servicing agent fees for all classes to 0.35% of average daily
net assets per fiscal year for all classes. During the year ended August 31,
2004, OFS waived $2,343, $7,588 and $1,668 for Class A, Class B and Class N
shares, respectively. This undertaking may be amended or withdrawn at any time.
- --------------------------------------------------------------------------------
5. FUTURES CONTRACTS
A futures contract is a commitment to buy or sell a specific amount of a
commodity or financial instrument at a negotiated price on a stipulated future
date. Futures contracts are traded on a commodity exchange. The Fund may buy and
sell futures contracts that relate to broadly based securities indices
(financial futures), debt securities (interest rate futures) and various
commodities (commodity index futures) inherent in the Fund's holdings of
structured notes. The Fund may also buy or write put or call options on these
futures contracts.
The Fund generally sells futures contracts to hedge against increases in
interest rates and the resulting negative effect on the value of fixed rate
portfolio securities, decreases in market value of portfolio securities, or
decreases in commodity prices. The Fund may also purchase futures contracts
without owning the underlying fixed-income security as an efficient or cost
effective means to gain exposure to changes in interest rates, commodity prices
or market indices. The Fund will then either purchase the underlying
fixed-income security or close out the futures contract.
Upon entering into a futures contract, the Fund is required to deposit
either cash or securities (initial margin) in an amount equal to a certain
percentage of the contract value. Subsequent payments (variation margin) are
made or received by the Fund each day. The variation margin payments are equal
to the daily changes in the contract value and are recorded as unrealized gains
and losses. The Fund recognizes a realized gain or loss when the contract is
closed or expires.
48 | OPPENHEIMER REAL ASSET FUND
Securities held in collateralized accounts to cover initial margin
requirements on open futures contracts are noted in the Statement of
Investments. The Statement of Assets and Liabilities reflects a receivable or
payable for the daily mark to market for variation margin. Realized gains and
losses are reported in the Statement of Operations as the closing and expiration
of futures contracts.
Risks of entering into futures contracts (and related options) include the
possibility that there may be an illiquid market and that a change in the value
of the contract or option may not correlate with changes in the value of the
underlying securities.
As of August 31, 2004, the Fund had outstanding futures contracts as follows:
UNREALIZED
EXPIRATION NUMBER OF VALUATION AS OF APPRECIATION
CONTRACT DESCRIPTION DATES CONTRACTS AUGUST 31, 2004 (DEPRECIATION)
- ------------------------------------------------------------------------------------------------------------
CONTRACTS TO PURCHASE
AGRICULTURE
Corn 12/14/04 1,369 $16,273,988 $(3,325,046)
Cotton #2 12/7/04 301 8,181,180 224,211
Soybean 11/12/04 484 15,179,450 (125,315)
Wheat 12/14/04-12/21/04 1,321 21,643,513 (1,530,167)
ENERGY
Brent Crude Oil 10/14/04 2,208 87,657,600 (1,421,640)
Crude Oil 9/21/04 3,607 151,926,840 1,029,424
Gas Oil 10/12/04 703 24,710,450 (1,905,536)
Heating Oil 9/30/04 969 45,703,854 (3,648,478)
Natural Gas 9/28/04 918 46,579,320 (6,443,453)
Unleaded Gasoline 9/30/04 927 44,326,359 (3,267,170)
LIVESTOCK
Feeder Cattle 10/28/04 100 5,471,250 (186,450)
Lean Hogs 10/15/04 375 9,896,250 (482,376)
Live Cattle 10/29/04 522 17,674,920 (665,158)
INDUSTRIAL METALS
Copper 12/29/04 598 19,150,950 592,718
London Metals Exchange
Aluminum High Grade 11/17/04 491 20,821,469 (275,616)
London Metals Exchange Lead 11/17/04 196 4,272,800 78,539
London Metals Exchange Nickel 11/17/04 64 4,778,880 (516,588)
London Metals Exchange Zinc 11/17/04 31 753,494 (44,848)
PRECIOUS METALS
Gold 100 oz 12/29/04 295 12,165,800 139,684
SOFTS
Coffee 12/20/04 141 3,838,725 90,034
Sugar #11 9/30/04 412 3,686,906 (137,782)
GOVERNMENTS
U.S. Long Bonds 12/20/04 21 2,337,563 21,578
U.S. Treasury Nts., 10 yr 12/20/04 217 24,371,813 67,624
-------------
(21,731,811)
-------------
49 | OPPENHEIMER REAL ASSET FUND
NOTES TO FINANCIAL STATEMENTS Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
5. FUTURES CONTRACTS Continued
UNREALIZED
EXPIRATION NUMBER OF VALUATION AS OF APPRECIATION
CONTRACT DESCRIPTION DATES CONTRACTS AUGUST 31, 2004 (DEPRECIATION)
- ---------------------------------------------------------------------------------------------------------
CONTRACTS TO SELL
SOFTS
Cocoa 12/14/04 28 $ 472,080 $ (8,695)
GOVERNMENTS
U.S. Long Bonds 9/21/04 205 23,068,906 (744,988)
U.S. Treasury Nts., 2 yr 9/30/04-12/30/04 2,290 485,745,578 (1,390,517)
U.S. Treasury Nts., 5 yr 12/20/04 653 72,268,734 (230,370)
PRECIOUS METALS
Silver 12/28/04 27 919,620 (11,171)
--------------
(2,385,741)
--------------
$(24,117,552)
==============
- --------------------------------------------------------------------------------
6. OPTION ACTIVITY
The Fund may buy and sell put and call options, or write put and covered call
options on portfolio securities in order to produce incremental earnings or
protect against changes in the value of portfolio securities.
The Fund generally purchases put options or writes covered call options to
hedge against adverse movements in the value of portfolio holdings. When an
option is written, the Fund receives a premium and becomes obligated to sell or
purchase the underlying security at a fixed price, upon exercise of the option.
Options are valued daily based upon the last sale price on the principal
exchange on which the option is traded and unrealized appreciation or
depreciation is recorded. The Fund will realize a gain or loss upon the
expiration or closing of the option transaction. When an option is exercised,
the proceeds on sales for a written call option, the purchase cost for a written
put option, or the cost of the security for a purchased put or call option is
adjusted by the amount of premium received or paid.
Securities designated to cover outstanding call options are noted in the
Statement of Investments where applicable. Contracts subject to call, expiration
date, exercise price, premium received and market value are detailed in a note
to the Statement of Investments. Options written are reported as a liability in
the Statement of Assets and Liabilities. Realized gains and losses are reported
in the Statement of Operations.
The risk in writing a call option is that the Fund gives up the
opportunity for profit if the market price of the security or commodity
increases and the option is exercised. The risk in writing a put option is that
the Fund may incur a loss if the market price of the security or commodity
decreases and the option is exercised. The risk in buying an option is that the
Fund pays a premium whether or not the option is exercised. The Fund also has
the additional risk of not being able to enter into a closing transaction if a
liquid secondary market does not exist.
50 | OPPENHEIMER REAL ASSET FUND
Written option activity for the year ended August 31, 2004 was as follows:
CALL OPTIONS PUT OPTIONS
------------------------- --------------------------
NUMBER OF AMOUNT OF NUMBER OF AMOUNT OF
CONTRACTS PREMIUMS CONTRACTS PREMIUMS
- -----------------------------------------------------------------------------------------
Options outstanding as of
August 31, 2003 100 $17,875 172 $37,670
Options written 2,566 1,440,424 1,471 335,335
Options closed or expired (1,875) (1,040,216) (1,494) (359,955)
Options exercised (701) (398,921) (49) (5,024)
-------------------------------------------------------
Options outstanding as of
August 31, 2004 90 $19,162 100 $8,026
=======================================================
- --------------------------------------------------------------------------------
7.TOTAL RETURN SWAP CONTRACTS
The Fund may enter into a total return swap transaction to maintain a total
return on a particular investment, or portion of its portfolio, or for other
non-speculative purposes. Because the principal amount is not exchanged, it
represents neither an asset nor a liability to either counterparty, and is
referred to as notional. The Fund records an increase or decrease to unrealized
gain (loss), in the amount due to or owed by the Fund at termination or
settlement. Total return swaps are subject to risks (if the counterparty fails
to meet its obligations).
As of August 31, 2004, the Fund had entered into the following total return swap
agreements:
PAID BY RECEIVED BY
THE FUND AT THE FUND AT
SWAP NOTIONAL AUGUST 31, AUGUST 31, TERMINATION UNREALIZED
COUNTERPARTY AMOUNT 2004 2004 DATES APPRECIATION
- --------------------------------------------------------------------------------------------------------------
Value of
One-Month total return of
LIBOR less 50 Lehman Brothers
Deutsche Bank AG $7,410,000 basis points CMBS Index 12/31/04 $155,909
Value of
One-Month total return of
Morgan Stanley LIBOR less 55 Lehman Investment
Capital Services, Inc. 7,410,000 basis points Grade Index 9/30/04 155,789
---------
$311,698
=========
Index abbreviations are as follows:
CMBS Commercial Mortgage Backed Securities Markets
LIBOR London-Interbank Offered Rate
51 | OPPENHEIMER REAL ASSET FUND
NOTES TO FINANCIAL STATEMENTS Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
8. ILLIQUID SECURITIES
As of August 31, 2004, investments in securities included issues that are
illiquid. A security may be considered illiquid if it lacks a readily available
market or if its valuation has not changed for a certain period of time. The
Fund will not invest more than 15% of its net assets (determined at the time of
purchase and reviewed periodically) in illiquid securities. The aggregate value
of illiquid securities subject to this limitation as of August 31, 2004 was
$6,820,868, which represents 0.77% of the Fund's net assets.
- --------------------------------------------------------------------------------
9. LITIGATION
Six complaints have been filed as putative derivative and class actions against
the Manager, OFS and the Distributor (collectively, "OppenheimerFunds"), as well
as 51 of the Oppenheimer funds (collectively, the "Funds") including this Fund,
and nine directors/ trustees of certain of the Funds other than this Fund
(collectively, the "Directors/Trustees"). The complaints allege that the Manager
charged excessive fees for distribution and other costs, improperly used assets
of the Funds in the form of directed brokerage commissions and 12b-1 fees to pay
brokers to promote sales of the Funds, and failed to properly disclose the use
of Fund assets to make those payments in violation of the Investment Company Act
of 1940 and the Investment Advisers Act of 1940. The complaints further allege
that by permitting and/or participating in those actions, the Directors/Trustees
breached their fiduciary duties to Fund shareholders under the Investment
Company Act of 1940 and at common law.
OppenheimerFunds believes that it is premature to render any opinion as to
the likelihood of an outcome unfavorable to them, the Funds or the
Directors/Trustees and that no estimate can yet be made with any degree of
certainty as to the amount or range of any potential loss. However,
OppenheimerFunds, the Funds and the Directors/Trustees believe that the
allegations contained in the complaints are without merit and intend to defend
these lawsuits vigorously.
52 | OPPENHEIMER REAL ASSET FUND
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TO THE BOARD OF TRUSTEES AND SHAREHOLDERS OF OPPENHEIMER REAL ASSET FUND:
We have audited the accompanying statement of assets and liabilities of
Oppenheimer Real Asset Fund, including the statement of investments, as of
August 31, 2004, and the related statement of operations for the year then
ended, the statements of changes in net assets for each of the two years in the
period then ended, and the financial highlights for the periods indicated. These
financial statements and financial highlights are the responsibility of the
Fund's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits.
We conducted our audits in accordance with the standards of the Public
Company Accounting Oversight Board (United States). Those standards require that
we plan and perform the audit to obtain reasonable assurance about whether the
financial statements and financial highlights are free of material misstatement.
An audit includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. Our procedures included
confirmation of securities owned as of August 31, 2004, by correspondence with
the custodian and brokers; where replies were not received from brokers, we
performed other auditing procedures. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position of
Oppenheimer Real Asset Fund as of August 31, 2004, the results of its operations
for the year then ended, the changes in its net assets for each of the two years
in the period then ended, and the financial highlights for the periods
presented, in conformity with accounting principles generally accepted in the
United States of America.
DELOITTE & TOUCHE LLP
Denver, Colorado
October 14, 2004
53 | OPPENHEIMER REAL ASSET FUND
FEDERAL INCOME TAX INFORMATION Unaudited
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
In early 2005, if applicable, shareholders of record will receive information
regarding all dividends and distributions paid to them by the Fund during
calendar year 2004. Regulations of the U.S. Treasury Department require the Fund
to report this information to the Internal Revenue Service.
Dividends and distributions of $0.2411, $0.2401, $0.2401, $0.2401 and
$0.2514 per share were paid to Class A, Class B, Class C, Class N and Class Y
shareholders, respectively, on December 8, 2003, of which $0.2401 was designated
as a "capital gain distribution" for federal income tax purposes. Whether
received in stock or in cash, the capital gain distribution should be treated by
shareholders as a gain from the sale of the capital assets held for more than
one year (long-term capital gains).
None of the dividends paid by the Fund during the year ended August 31,
2004 are eligible for the corporate dividend-received deduction.
Dividends, if any, paid by the Fund during the fiscal year ended August
31, 2004 which are not designated as capital gain distributions, may be eligible
for lower individual income tax rates to the extent that the Fund has received
qualified dividend income as stipulated by recent tax legislation. In early
2005, shareholders of record will receive information regarding the percentage
of distributions that are eligible for lower individual income tax rates. The
amount will be the maximum amount allowed.
The foregoing information is presented to assist shareholders in reporting
distributions received from the Fund to the Internal Revenue Service. Because of
the complexity of the federal regulations which may affect your individual tax
return and the many variations in state and local tax regulations, we recommend
that you consult your tax advisor for specific guidance.
54 | OPPENHEIMER REAL ASSET FUND
PORTFOLIO PROXY VOTING POLICIES AND PROCEDURES;
UPDATES TO STATEMENTS OF INVESTMENTS Unaudited
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
The Fund has adopted Portfolio Proxy Voting Policies and Procedures under which
the Fund votes proxies relating to securities ("portfolio proxies") held by the
Fund. A description of the Fund's Portfolio Proxy Voting Policies and Procedures
is available (i) without charge, upon request, by calling the Fund toll-free at
1.800.525.7048, (ii) on the Fund's website at www.oppenheimerfunds.com, and
(iii) on the SEC's website at www.sec.gov. In addition, the Fund is required to
file new Form N-PX, with its complete proxy voting record for the 12 months
ended June 30th, no later than August 31st of each year. The Fund's Form N-PX
filing is available (i) without charge, upon request, by calling the Fund
toll-free at 1.800.525.7048, and (ii) on the SEC's website at www.sec.gov.
The Fund files its complete schedule of portfolio holdings with the SEC
for the first quarter and the third quarter of each fiscal year on Form N-Q. The
Fund's Form N-Q filings are available on the SEC's website at
http://www.sec.gov. Those forms may be reviewed and copied at the SEC's Public
Reference Room in Washington D.C. Information on the operation of the Public
Reference Room may be obtained by calling 1-800-SEC-0330.
55 | OPPENHEIMER REAL ASSET FUND
TRUSTEES AND OFFICERS Unaudited
- --------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------
NAME, POSITION(S) HELD WITH PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS; OTHER TRUSTEESHIPS/DIRECTORSHIPS HELD
FUND, LENGTH OF SERVICE, AGE BY TRUSTEE; NUMBER OF PORTFOLIOS IN FUND COMPLEX CURRENTLY OVERSEEN BY TRUSTEE
INDEPENDENT THE ADDRESS OF EACH TRUSTEE IN THE CHART BELOW IS 6803 S. TUCSON WAY, CENTENNIAL,
TRUSTEES CO 80112-3924. EACH TRUSTEE SERVES FOR AN INDEFINITE TERM, UNTIL HIS OR HER RESIGNATION,
RETIREMENT, DEATH OR REMOVAL.
WILLIAM L. ARMSTRONG, Chairman of the following private mortgage banking companies: Cherry Creek
Chairman of the Board of Mortgage Company (since 1991), Centennial State Mortgage Company (since
Trustees (since 2003) and 1994), The El Paso Mortgage Company (since 1993), Transland Financial Services,
Trustee (since 1999) Inc. (since 1997); Chairman of the following private companies: Great Frontier
Age: 67 Insurance (insurance agency) (since 1995), Ambassador Media Corporation and
Broadway Ventures (since 1984); a director of the following public companies:
Helmerich & Payne, Inc. (oil and gas drilling/production company) (since 1992)
and UNUMProvident (insurance company) (since 1991). Mr. Armstrong is also
a Director/Trustee of Campus Crusade for Christ and the Bradley Foundation.
Formerly a director of the following: Storage Technology Corporation (a publicly-
held computer equipment company) (1991-February 2003), and International
Family Entertainment (television channel) (1992-1997), Frontier Real Estate, Inc.
(residential real estate brokerage) (1994-1999), and Frontier Title (title insurance
agency) (1995-June 1999); a U.S. Senator (January 1979-January 1991). Oversees
38 portfolios in the OppenheimerFunds complex.
ROBERT G. AVIS, Formerly, Director and President of A.G. Edwards Capital, Inc. (General Partner
Trustee (since 1997) of private equity funds) (until February 2001); Chairman, President and Chief
Age: 73 Executive Officer of A.G. Edwards Capital, Inc. (until March 2000); Vice Chairman
and Director of A.G. Edwards, Inc. and Vice Chairman of A.G. Edwards & Sons,
Inc. (its brokerage company subsidiary) (until March 1999); Chairman of A.G.
Edwards Trust Company and A.G.E. Asset Management (investment advisor)
(until March 1999); and a Director (until March 2000) of A.G. Edwards &
Sons and A.G. Edwards Trust Company. Oversees 38 portfolios in the
OppenheimerFunds complex.
GEORGE C. BOWEN, Formerly Assistant Secretary and a director (December 1991-April 1999) of
Trustee (since 1998) Centennial Asset Management Corporation; President, Treasurer and a director
Age: 67 (June 1989-April 1999) of Centennial Capital Corporation; Chief Executive
Officer and a director of MultiSource Services, Inc. (March 1996-April 1999).
Until April 1999 Mr. Bowen held several positions in subsidiary or affiliated
companies of the Manager. Oversees 38 portfolios in the OppenheimerFunds
complex.
EDWARD L. CAMERON, A member of The Life Guard of Mount Vernon, George Washington's home
Trustee (since 1999) (since June 2000). Formerly Director (March 2001-May 2002) of Genetic ID, Inc.
Age: 66 and its subsidiaries (a privately held biotech company); a partner (July 1974-June
1999) with PricewaterhouseCoopers LLP (an accounting firm); and Chairman
(July 1994-June 1998) of Price Waterhouse LLP Global Investment Management
Industry Services Group. Oversees 38 portfolios in the OppenheimerFunds
complex.
JON S. FOSSEL, Director (since February 1998) of Rocky Mountain Elk Foundation (a not-for-
Trustee (since 1997) profit foundation); a director (since 1997) of Putnam Lovell Finance (finance
Age: 62 company); a director (since June 2002) of UNUMProvident (an insurance com-
pany). Formerly a director (October 1999-October 2003) of P.R. Pharmaceuticals
(a privately held company); Chairman and a director (until October 1996) and
President and Chief Executive Officer (until October 1995) of the Manager;
President, Chief Executive Officer and a director (until October 1995) of
56 | OPPENHEIMER REAL ASSET FUND
JON S. FOSSEL, Oppenheimer Acquisition Corp., Shareholders Services Inc. and Shareholder
Continued Financial Services, Inc. Oversees 38 portfolios in the OppenheimerFunds complex.
SAM FREEDMAN, Director of Colorado Uplift (a non-profit charity) (since September 1984).
Trustee (since 1997) Formerly (until October 1994) Mr. Freedman held several positions in subsidiary
Age: 63 or affiliated companies of the Manager. Oversees 38 portfolios in the
OppenheimerFunds complex.
BEVERLY L. HAMILTON, Trustee of Monterey International Studies (an educational organization) (since
Trustee (since 2002) February 2000); a director of The California Endowment (a philanthropic organi-
Age: 57 zation) (since April 2002) and of Community Hospital of Monterey Peninsula
(educational organization) (since February 2002); a director of America Funds
Emerging Markets Growth Fund (since October 1991) (an investment company);
an advisor to Credit Suisse First Boston's Sprout venture capital unit. Mrs.
Hamilton also is a member of the investment committees of the Rockefeller
Foundation and of the University of Michigan. Formerly, Trustee of MassMutual
Institutional Funds (open-end investment company) (1996-May 2004); a director
of MML Series Investment Fund (April 1989-May 2004) and MML Services (April
1987-May 2004) (investment companies); member of the investment committee
(2000-2003) of Hartford Hospital; an advisor (2000-2003) to Unilever (Holland)'s
pension fund; and President (February 1991-April 2000) of ARCO Investment
Management Company. Oversees 37 portfolios in the OppenheimerFunds
complex.
ROBERT J. MALONE, Chairman, Chief Executive Officer and Director of Steele Street State Bank
Trustee (since 2002) (a commercial banking entity) (since August 2003); director of Colorado UpLIFT
Age: 59 (a non-profit organization) (since 1986); trustee (since 2000) of the Gallagher
Family Foundation (non-profit organization). Formerly, Chairman of U.S. Bank-
Colorado (a subsidiary of U.S. Bancorp and formerly Colorado National Bank,)
(July 1996-April 1, 1999), a director of: Commercial Assets, Inc. (a REIT) (1993-
2000), Jones Knowledge, Inc. (a privately held company) (2001-July 2004) and
U.S. Exploration, Inc. (oil and gas exploration) (1997-February 2004). Oversees
37 portfolios in the OppenheimerFunds complex.
F. WILLIAM MARSHALL, JR., Trustee of MassMutual Institutional Funds (since 1996) and MML Series
Trustee (since 2000) Investment Fund (since 1987) (both open-end investment companies) and the
Age: 62 Springfield Library and Museum Association (since 1995) (museums) and the
Community Music School of Springfield (music school) (since 1996); Trustee
(since 1987), Chairman of the Board (since 2003) and Chairman of the investment
committee (since 1994) for the Worcester Polytech Institute (private
university); and President and Treasurer (since January 1999) of the SIS Fund
(a private not for profit charitable fund). Formerly, member of the investment
committee of the Community Foundation of Western Massachusetts (1998 -
2003); Chairman (January 1999-July 1999) of SIS & Family Bank, F.S.B. (formerly
SIS Bank) (commercial bank); and Executive Vice President (January 1999-July
1999) of Peoples Heritage Financial Group, Inc. (commercial bank). Oversees
38 portfolios in the OppenheimerFunds complex.
57 | OPPENHEIMER REAL ASSET FUND
TRUSTEES AND OFFICERS Unaudited / Continued
- --------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------
INTERESTED TRUSTEE THE ADDRESS OF MR. MURPHY IN THE CHART BELOW IS TWO WORLD FINANCIAL CENTER,
AND OFFICER 225 LIBERTY STREET, 11TH FLOOR, NEW YORK, NY 10281-1008. MR. MURPHY SERVES FOR
AN INDEFINITE TERM, UNTIL HIS RESIGNATION, DEATH OR REMOVAL.
JOHN V. MURPHY, Chairman, Chief Executive Officer and director (since June 2001) and President
President and Trustee (since September 2000) of the Manager; President and a director or trustee
(since 2001) of other Oppenheimer funds; President and a director (since July 2001) of
Age: 55 Oppenheimer Acquisition Corp. (the Manager's parent holding company) and
of Oppenheimer Partnership Holdings, Inc. (a holding company subsidiary of the
Manager); a director (since November 2001) of OppenheimerFunds Distributor,
Inc. (a subsidiary of the Manager); Chairman and a director (since July 2001)
of Shareholder Services, Inc. and of Shareholder Financial Services, Inc. (transfer
agent subsidiaries of the Manager); President and a director (since July 2001) of
OppenheimerFunds Legacy Program (a charitable trust program established by
the Manager); a director of the following investment advisory subsidiaries of the
Manager: OFI Institutional Asset Management, Inc., Centennial Asset Management
Corporation, Trinity Investment Management Corporation and Tremont Capital
Management, Inc. (since November 2001), HarbourView Asset Management Corporation
and OFI Private Investments, Inc. (since July 2001); President (since November 1,
2001) and a director (since July 2001) of Oppenheimer Real Asset Management,
Inc.; Executive Vice President (since February 1997) of Massachusetts Mutual Life
Insurance Company (the Manager's parent com- pany); a director (since June 1995)
of DLB Acquisition Corporation (a holding company that owns the shares of Babson
Capital Management LLC); a member of the Investment Company Institute's Board of
Governors (elected to serve from October 3, 2003 through September 30, 2006).
Formerly, Chief Operating Officer (September 2000-June 2001) of the Manager;
President and trustee (November 1999-November 2001) of MML Series Investment Fund
and MassMutual Institutional Funds (open-end investment companies); a director
(September 1999-August 2000) of C.M. Life Insurance Company; President, Chief
Executive Officer and director (September 1999-August 2000) of MML Bay State Life
Insurance Company; a director (June 1989-June 1998) of Emerald Isle Bancorp and
Hibernia Savings Bank (a wholly-owned subsidiary of Emerald Isle Bancorp).
Oversees 73 portfolios as Trustee/Director and 10 portfolios as Officer in the
OppenheimerFunds complex.
- ----------------------------------------------------------------------------------------------------------------------
OFFICERS THE ADDRESS OF THE OFFICERS IN THE CHART BELOW IS AS FOLLOWS: FOR MESSRS. BAUM,
MANIOUDAKIS, AND ZACK, TWO WORLD FINANCIAL CENTER, 225 LIBERTY STREET, 11TH FLOOR,
NEW YORK, NY 10281-1008, FOR MESSRS. VANDEHEY AND WIXTED 6803 S. TUCSON WAY,
CENTENNIAL, CO 80112-3924. EACH OFFICER SERVES FOR AN ANNUAL TERM OR UNTIL HIS OR
HER EARLIER RESIGNATION, DEATH OR REMOVAL.
KEVIN BAUM, Vice President of the Manager since October 2000; a Chartered Financial
Vice President and Analyst; he has served as the Fund's principal trader since its inception in
Portfolio Manager March 1997; an officer of 1 portfolio in the OppenheimerFunds complex.
(since 2003)
Age: 34
ANGELO MANIOUDAKIS, Senior Vice President of the Manager (since April 2002), of HarbourView
Vice President and Asset Management Corporation (since April, 2002 and of OFI Institutional
Portfolio Manager Asset Management, Inc. (since June 2002); an officer of 14 portfolios in the
(since 2002) OppenheimerFunds complex. Formerly Executive Director and portfolio manager
Age: 37 for Miller, Anderson & Sherrerd, a division of Morgan Stanley Investment
Management (August 1993-April 2002).
58 | OPPENHEIMER REAL ASSET FUND
BRIAN W. WIXTED, Senior Vice President and Treasurer (since March 1999) of the Manager;
Treasurer (since 1999) Treasurer of HarbourView Asset Management Corporation, Shareholder Financial
Age: 44 Services, Inc., Shareholder Services, Inc., Oppenheimer Real Asset Management
Corporation, and Oppenheimer Partnership Holdings, Inc. (since March 1999),
of OFI Private Investments, Inc. (since March 2000), of OppenheimerFunds
International Ltd. and OppenheimerFunds plc (since May 2000), of OFI
Institutional Asset Management, Inc. (since November 2000), and of
OppenheimerFunds Legacy Program (a Colorado non-profit corporation) (since June
2003); Treasurer and Chief Financial Officer (since May 2000) of OFI Trust
Company (a trust company subsidiary of the Manager); Assistant Treasurer (since
March 1999) of Oppenheimer Acquisition Corp. Formerly Assistant Treasurer of
Centennial Asset Management Corporation (March 1999-October 2003) and
OppenheimerFunds Legacy Program (April 2000-June 2003); Principal and Chief
Operating Officer (March 1995-March 1999) at Bankers Trust Company-Mutual Fund
Services Division. An officer of 83 portfolios in the OppenheimerFunds complex.
ROBERT G. ZACK, Executive Vice President (since January 2004) and General Counsel (since
Vice President and Secretary February 2002) of the Manager; General Counsel and a director (since November
(since 2001) 2001) of the Distributor; General Counsel (since November 2001) of Centennial
Age: 56 Asset Management Corporation; Senior Vice President and General Counsel
(since November 2001) of HarbourView Asset Management Corporation;
Secretary and General Counsel (since November 2001) of Oppenheimer
Acquisition Corp.; Assistant Secretary and a director (since October 1997) of
OppenheimerFunds International Ltd. and OppenheimerFunds plc; Vice President
and a director (since November 2001) of Oppenheimer Partnership Holdings,
Inc.; a director (since November 2001) of Oppenheimer Real Asset Management,
Inc.; Senior Vice President, General Counsel and a director (since November 2001)
of Shareholder Financial Services, Inc., Shareholder Services, Inc., OFI Private
Investments, Inc. and OFI Trust Company; Vice President (since November 2001)
of OppenheimerFunds Legacy Program; Senior Vice President and General
Counsel (since November 2001) of OFI Institutional Asset Management, Inc.; a
director (since June 2003) of OppenheimerFunds (Asia) Limited. Formerly Senior
Vice President (May 1985-December 2003), Acting General Counsel (November
2001-February 2002) and Associate General Counsel (May 1981-October 2001)
of the Manager; Assistant Secretary of Shareholder Services, Inc. (May 1985-
November 2001), Shareholder Financial Services, Inc. (November 1989-November
2001); and OppenheimerFunds International Ltd. (October 1997-November
2001). An officer of 83 portfolios in the OppenheimerFunds complex.
MARK S. VANDEHEY, Senior Vice President and Chief Compliance Officer (since March 2004) of the
Vice President and Manager; Vice President (since June 1983) of OppenheimerFunds Distributor,
Chief Compliance Officer Inc., Centennial Asset Management Corporation and Shareholder Services, Inc.
(since 2004) Formerly (until February 2004) Vice President and Director of Internal Audit of
Age: 53 OppenheimerFunds, Inc. An officer of 83 portfolios in the Oppenheimer funds
complex.
THE FUND'S STATEMENT OF ADDITIONAL INFORMATION CONTAINS ADDITIONAL INFORMATION
ABOUT THE FUND'S TRUSTEES AND IS AVAILABLE WITHOUT CHARGE UPON REQUEST BY
CALLING 1.800.525.7048.
59 | OPPENHEIMER REAL ASSET FUND
ITEM 2. CODE OF ETHICS
The registrant has adopted a code of ethics that applies to the
registrant's principal executive officer, principal financial officer, principal
accounting officer or controller or persons performing similar functions.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT
The Board of Trustees of the registrant has determined that Edward L.
Cameron, the Chairman of the Board's Audit Committee, and George C. Bowen, a
member of the Board's Audit Committee, possess the technical attributes
identified in Instruction 2(b) of Item 3 to Form N-CSR to qualify as "audit
committee financial experts," and has designated Messrs. Cameron and Bowen as
the Audit Committee's financial experts. Messrs. Cameron and Bowen are
"independent" Trustees pursuant to paragraph (a)(2) of Item 3 to Form N-CSR.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES
(a) Audit Fees
The principal accountant for the audit of the registrant's annual
financial statements billed $32,000 in fiscal 2004 and $31,000 in
fiscal 2003.
(b) Audit-Related Fees
The principal accountant for the audit of the registrant's annual
financial statements billed no such fees to the registrant during
the last two fiscal years.
The principal accountant for the audit of the registrant's annual
financial statements billed no such fees in fiscal 2004 and
$40,259 in fiscal 2003 to the registrant's investment adviser or
any entity controlling, controlled by, or under common control
with the adviser that provides ongoing services to the registrant.
Such fees would include, among others: due diligence related to
mergers and acquisitions, accounting consultations and audits in
connection with acquisitions, internal control reviews and
consultation concerning financial accounting and reporting
standards.
(c) Tax Fees
The principal accountant for the audit of the registrant's annual
financial statements billed no such fees to the registrant during
the last two fiscal years.
The principal accountant for the audit of the registrant's annual
financial statements billed no such fees in fiscal 2004 and
$10,448 in fiscal 2003 to the registrant's investment adviser or
any entity controlling, controlled by, or under common control
with the adviser that provides ongoing services to the registrant.
Such fees would include, among others: tax compliance, tax
planning and tax advice. Tax compliance generally involves
preparation of original and amended tax returns, claims for a
refund and tax payment-planning services. Tax planning and tax
advice
includes assistance with tax audits and appeals, tax advice
related to mergers and acquisitions and requests for rulings or
technical advice from taxing authorities.
(d) All Other Fees
The principal accountant for the audit of the registrant's annual
financial statements billed no such fees to the registrant during
the last two fiscal years.
The principal accountant for the audit of the registrant's annual
financial statements billed no such fees in fiscal 2004 and $3,500
in fiscal 2003 to the registrant's investment adviser or any
entity controlling, controlled by, or under common control with
the adviser that provides ongoing services to the registrant.
Such fees would include services provided to the registrant's
Board of Trustees with respect to the annual renewal of the
registrant's investment advisory agreement.
(e) (1) During its regularly scheduled periodic meetings, the
registrant's audit committee will pre-approve all audit,
audit-related, tax and other services to be provided by the
principal accountants of the registrant.
The audit committee has delegated pre-approval authority to its
Chairman for any subsequent new engagements that arise between
regularly scheduled meeting dates provided that any fees such
pre-approved are presented to the audit committee at its next
regularly scheduled meeting.
Pre-approval of non-audit services is waived provided that: 1) the
aggregate amount of all such services provided constitutes no more
than five percent of the total amount of fees paid by the
registrant to it principal accountant during the fiscal year in
which services are provided 2) such services were not recognized
by the registrant at the time of engagement as non-audit services
and 3) such services are promptly brought to the attention of the
audit committee of the registrant and approved prior to the
completion of the audit.
(2) 100%
(f) Not applicable as less than 50%.
(g) The principal accountant for the audit of the registrant's annual
financial statements billed no such fees in fiscal 2004 and
$54,207 in fiscal 2003 to the registrant and the registrant's
investment adviser or any entity controlling, controlled by, or
under common control with the adviser that provides ongoing
services to the registrant related to non-audit fees. Those
billings did not include any prohibited non-audit services as
defined by the Securities Exchange Act of 1934.
(h) The registrant's audit committee of the board of trustees has
considered whether the provision of non-audit services that were
rendered to the registrant's investment adviser, and any entity
controlling, controlled by, or under common control with the
investment adviser that provides ongoing services to the
registrant that were not pre-approved pursuant to paragraph
(c)(7)(ii) of Rule 2-01 of Regulation S-X is
(i) compatible with maintaining the principal account's independence.
No such services were rendered.
ITEM 5. NOT APPLICABLE
ITEM 6. SCHEDULE OF INVESTMENTS
Not applicable
ITEM 7. NOT APPLICABLE
ITEM 8. NOT APPLICABLE
ITEM 9. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The members of the Governance Committee are Robert Malone (Chairman),
William Armstrong, Beverly Hamilton and F. William Marshall, Jr. Each member of
the Committee is independent, meaning each person is not "interested person" as
defined in the Act. The Governance Committee was established in August 2004. The
Governance Committee is expected to consider general governance matters,
including a formal process for shareholders to send communications to the Board
and the qualifications of candidates for board positions including consideration
of any candidate recommended by shareholders.
The Governance Committee has not yet adopted a charter, but anticipates that it
will do so by the end of this calendar year. The Committee has temporarily
adopted the process previously adopted by the Audit Committee regarding
shareholder submission of nominees for board positions. That policy is as
follows. To date, the Committee has been able to identify from its own resources
an ample number of qualified candidates. Nonetheless, shareholders may submit
names of individuals, accompanied by complete and properly supported resumes,
for the Governance Committee's consideration by mailing such information to the
Committee in care of the Fund. The Committee may consider such persons at such
time as it meets to consider possible nominees. The Committee, however, reserves
sole discretion to determine the candidates to present to the Board and/or
shareholders when it meets for the purpose of considering potential nominees.
This Committee also will select and nominate, to the full Board, nominees for
election as Trustees, and select and nominate Independent Trustees for election.
The Committee may, but need not, consider the advice and recommendation of the
Manager and its affiliates in selecting nominees. The full Board elects new
trustees except for those instances when a shareholder vote is required.
Shareholders who desire to communicate with the Board should address
correspondence to the Board or an individual Board member and may submit their
correspondence electronically at www.oppenheimerfunds.com
http://www.oppenheimerfunds.com/ under the caption "contact us" or by mail to
the Fund at the address above. The Governance Committee will consider if a
different process should be recommended to the Board.
ITEM 10. CONTROLS AND PROCEDURES
(a) Based on their evaluation of registrant's disclosure controls and
procedures (as defined in rule 30a-3(c) under the Investment
Company Act of 1940 (17 CFR 270.30a-3(c)) as of August 31, 2004,
registrant's principal executive officer and principal financial
officer found registrant's disclosure controls and procedures to
provide reasonable assurances that information required to be
disclosed by registrant in the reports that it files under the
Securities Exchange Act of 1934 (a) is accumulated and
communicated to registrant's management, including its principal
executive officer and principal financial officer, to allow timely
decisions regarding required disclosure, and (b) is recorded,
processed, summarized and reported, within the time periods
specified in the rules and forms adopted by the U.S. Securities
and Exchange Commission.
(b) There have been no significant changes in registrant's internal
controls over financial reporting that occurred during the
registrant's last fiscal half-year that has materially affected,
or is reasonably likely to materially affect, the registrant's
internal control over financial reporting.
ITEM 11. EXHIBITS.
(A) EXHIBIT ATTACHED HERETO. (ATTACH CODE OF ETHICS AS EXHIBIT)(NOT
APPLICABLE TO SEMIANNUAL REPORTS)
(B) EXHIBITS ATTACHED HERETO. (ATTACH CERTIFICATIONS AS EXHIBITS)